For the first time this year, companies are required to report the compensation for their median employee, and a ratio of that figure compared with their CEO’s. The regulation has been criticized for lacking a specified measurement methodology, making comparisons between companies next to meaningless.
For example, the company on Equilar’s list with the widest gap in CEO-to-median employee pay was ManpowerGroup, a workforce solutions firm. The company’s pay ratio was 2,483:1, meaning the CEO earned thousands of times more than the median employee. But it’s less about CEO Jonas Prising’s pay than the company’s structure: It has over 600,000 employees worldwide, many of whom are “associates” who work on a temporary basis.
The company identified its median employee as an associate in the United Kingdom who earned $4,828 from the company. Focusing just on permanent staffers, the company’s median employee is a junior sourcing consultant in Belgium who earned $43,344. Compared with the CEO, that gives a pay ratio of 276:1, much more in line with the overall norm.
Buffett, with his $100,000 salary, had the smallest CEO pay ratio at 2:1.