Medical supplies are disproportionately available to the wealthy. To fix these inequities, we need an immediate, massive, humanitarian response to coronavirus from the federal government.
For the first time in history, U.S. publicly held corporations are starting to report the pay gaps between their CEOs and most typical workers. Many of the new ratio disclosures make for astounding reading, but media coverage so far has been spotty.
Last Friday, for example, one company — YUM China Holdings — reported a pay ratio of 2,818 to 1, the widest gap between CEO and median worker pay so far disclosed under Securities and Exchange Commission regulations now in effect. Another firm, the payment processing giant First Data, reported a gap almost as large, at 2,028 to 1. No major media outlets have yet published stories about these eye-popping numbers.
Fortunately, Bloomberg has launched an online tracker that allows anyone to look up pay ratios at individual companies as they become available and in a format much easier to digest than the firms’ reports to the SEC. This site lists pay ratios released for S&P 500 and Russell 1000 companies, tracks them on a graph divided by industry, and provides shortcuts to the lowest, median, and highest pay ratios released so far.
As of April 2, the auto parts maker Aptiv has the highest ratio listed in the Bloomberg tracker, with a gap of 2,526 to 1. The median ratio? That belongs to the steelmaker Nucor, with a ratio of 133 to 1.
One limitation of the Bloomberg tracker: The data don’t include companies beyond the Russell 1000, a listing of the top 1,000 U.S. companies. This means we don’t see smaller firms on the Bloomberg list, even if they have huge ratios (see, for example, my previous post on Del Monte, a “small” firm with a pay ratio of 1,465-1). Nor does YUM China, the firm with the largest ratio to date, appear in the Bloomberg tracker. A spinoff of the YUM! fast food company, this holding company doesn’t appear in either the S&P 500 or Russell 1000. (Update: As of April 5, Bloomberg had added Yum China to the tracker)
Inequality.org co-editor Sarah Anderson on the U.S. companies that paid their CEOs more than 1,000 times their median worker pay last year -- and what we can do to narrow the gaps.
Even so, the Bloomberg tracker remains a valuable tool for visualizing how incredibly unequal our corporate pay landscape has become.
But not everyone is thrilling to the clarity of this new corporate pay picture. The most vociferous opposition to the new pay-ratio disclosure rules has come from the retail industry. Matthew Shay, the head of the industry’s massive lobbying group, the National Retail Federation, decried the new rules in an op-ed for CNBC. Shay particularly objects to the inclusion of part-time and seasonal workers in the calculation of median worker pay.
“Including these workers in the SEC’s calculation,” he writes, “distorts the final pay ratio and creates a false picture about a company’s commitment to pay employees, including part-time workers, a fair wage.”
The retail industry fought hard to be able to convert its part-time and seasonal workers into full-time equivalents. The SEC refused, arguing that including actual pay figures better reflects “the actual composition of the registrant’s workforce and thus furthers the purpose of providing shareholders with useful information about a registrant’s overall compensation practices.”
In the retail sector, those practices reflect a business model that revolves around employing part-time workers who endure low wages, unpredictable schedules, and paltry health benefits and vacation time. The retail lobby loves to tout these jobs as “flexible work opportunities.”
The nation’s largest retailers — Walmart, Kroger, Home Depot, Costco, Target — have yet to report their ratios. But the retail ratios reported so far all run above the corporate median. Among them:
- Kohl’s: a pay ratio of 1,264 to 1, with the median worker making a paltry $8,975 compared to the CEO pay of $11.3 million.
- Burlington Coat Factory: a pay ratio of 763 to 1, with the CEO paid $8.9 million compared to a median employee salary of $11,662.
- Under Armour: a pay ratio of 378 to 1, with median employee paid $10,686 a year.
- Sears: a pay ratio of 264 to 1, with median worker paid $16,442
- Smart & Final, a West Coast retailer, a pay ratio of 462 to 1, with median employee paid $19,618 and CEO pay at $9.7 million.
- Tractor Supply Company: a pay ratio of 278 to 1, with median employee compensation at $24,108.
- Sprouts Farmers Market: a pay ratio of 233 to 1, with the median salary at $19,420.
- Build-a-Bear Workshop: a pay ratio of 306 to 1, with the median worker paid only $6,198 a year, a not so warm and fuzzy figure for the toy maker.
In his CNBC op-ed, National Retail Federation president Shay asked, “Does anyone really think comparing the paychecks of part-time teenagers in their first jobs to compensation of CEOs yields any useful insight about the management effectiveness or investment quality of retail companies? Or that it will generate effective policy ideas on how to put more Americans on a path to success?”
Shay likely meant for these questions to be rhetorical. But I think there’s an answer here — and it’s not good for the CEOs he’s trying to protect. Learning more about these companies, now easier than ever with the Bloomberg tracker, means we can more fully understand the inequality beast and generate those “effective policy ideas” Shay seems to find so elusive.