CEO Pay Now $7,000 an Hour – 350 Times the Average Worker's

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While most Americans may feel overworked and underpaid, the steady climb of CEO pay has ensured that chief executives most assuredly are neither.

According to data compiled by the AFL-CIO, the average CEO pay at 327 of the nation's biggest companies reached $12.3 million when you include salaries, bonuses, perks, stock awards, stock options and other incentives.

It's the equivalent of a whopping $7,000 an hour – 350 times the typical worker's pay of $20 an hour, according to Bureau of Labor Statistics (BLS) data – and that's just the average. Some CEO pay is much higher.

For example, the most generously compensated chief executive in the United States is Google Inc. (Nasdaq: GOOG) CEO Eric Schmidt. His total annual compensation of just under $101 million breaks down to about $48,548 per hour, or about $809 per minute.

With the average worker making about $35,204 a year, that means CEO Schmidt makes more money in an hour than most Americans earn in a year.

The widening gulf in pay is reflected in the sluggish U.S. economy, and it's starting to alarm more and more people.

"I'm shell-shocked. I can't believe this can go on," John Bogle, founder of the Vanguard mutual fund company and a long-time critic of CEO pay, told USA Today. "I can't believe owners of these companies can't take a bigger stand."

Why Soaring CEO Pay is a Negative

While most people would agree that chief executives deserve substantially more money than workers, few think a ratio of 350 times the average worker's salary is reasonable, or, for that matter, healthy.

It's not even the norm for CEOs in other major economies. The ratio of CEO pay to average worker pay in neighboring Canada is 204, in Germany it's 147, in the U.K. it's 84, and in Japan it's just 67.

While it's true that "hard work does lead to great benefits, it's also important to remind people that they often overestimate what their contribution is to overall outcome to the company or a project," Heidi Moore, economics editor at The Guardian, said in Yahoo Finance's The Daily Ticker.

Moore said the disconnect between compensation for workers and CEOs is actually bad for the U.S. economy.

"It's potentially one of the reasons our economy is not moving forward," she said. "You'll find that inequality usually rises as an economy struggles."

And as the gap between CEO pay and average worker pay keeps growing, it triggers anger and negative publicity that companies could live without.

Then you end up with things like the Occupy Wall Street movement (which has never totally gone away) and strident statements from worker groups like the AFL-CIO.

"American chief executives continued to do very well for themselves last year, while workers struggle to make ends meet," Richard Trumka, president of the AFL-CIO, said in a statement. "We are calling out the hypocrisy of rich CEOs who have the gall to ask for corporate tax cuts to be paid for by squeezing the retirement security of working America. The American public deserves to know the truth about their self-serving agenda."

CEO Pay: Who Makes the Most

Eric Schmidt, the only CEO to break the $100 million mark, tops the list but he has plenty of well-heeled company. Here's a list of the top 10, according to the AFL-CIO data. Note that the most compensation doesn't always go to the CEOs of the biggest companies:

  • Eric Schmidt, Google, Inc.
    $101 million (company market cap: $264 billion)
  • Larry Ellison, Oracle Corp. (Nasdaq: ORCL)
    $96.2 million (company market cap: $152.41 billion)
  • Leslie Moonves, CBS Corp. (NYSE: CBS)
    $69.9 million (company market cap: $28.98 billion)
  • Mario J. Gabelli, Gamco Investors Inc. (NYSE: GBL)
    $61.7 million (company market cap: $1.36 billion)
  • Brian F. Maxted, Kosmos Energy Ltd. (NYSE: KOS)
    $57.6 million (company market cap: $4.09 billion)
  • Brett A. Roberts, Credit Acceptance Corp. (Nasdaq: CACC)
    $54.3 million (company market cap: $2.33 billion)
  • David M. Zaslav, Discovery Communications Inc. (NYSE: DISCA)
    $50 million (company market cap: $19.05 billion)
  • Michael S. Jeffries, Abercrombie & Fitch Co. (NYSE: ANF)
    $48 million (company market cap: $4 billion)
  • Richard M. Bracken, HCA Holdings Inc. (NYSE: HCA)
    $46.4 million (company market cap: $16.67 billion)
  • Robert Iger, Walt Disney Co. (NYSE: DIS)
    $40.2 million (company market cap: $110.53 billion)

As for what can be done to reduce outlandish CEO pay, Moore said the best strategy may be to keep publicizing their pay to shame them – and the corporate boards that approve their compensation packages – into ratcheting things down a bit.

"Shame actually goes a long way because a lot of what happens on a corporate board happens almost in a bubble," Moore said. "It's a really important motivator to ask people to justify why they're getting the rewards that they're getting."

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Join the conversation. Click here to jump to comments…

  1. H. Craig Bradley | April 24, 2013

    BOO-HOO

    Guess what, the average civilian city employee in Glendale, CA or Beverly Hills, CA or probably any mid-sized or large urban area is about $100,000/year, not "$20.0/hour". Sure, CEO's make Boo-Koo dollars, but so do local government employees.

    In Glendale, there are at least 700 city employees and managers who make six figure salaries. Some make upwards of $250,000/year. Even a rookie police officer makes at least $97,000/year without overtime. Ditto for City Firefighters. Moreover, they get full retirement at 55 and 80% of their salary too, plus healthcare. Can't beat that. The losers are those who don't have the power of a union behind them or are not in the corner office at Corporate Headquarters.

    • Daniel Evans | July 18, 2013

      Lucky you!

      Some of us don't have as many multimillionaire taxpayers to support such a payroll. The average salary for a police officer(not just rookies, all patrol officers) is $22/hour in Ohio. Most Ohio Firefighters are Volunteers who receive no pay. I have a union job, after 18 years I make $17.50!

      Must be nice to live in Beverly Hills, and not with the Hillbillies.

      • Stephen | October 28, 2013

        Who Cares If They Make 100K A Year. They're Spending It All To Live In Cali.

  2. Jim | December 1, 2013

    Those that want to cap CEO pay know nothing about economics. They are just jealous people. Redistribution of wealth in this manner is nothing but a cheap socialist cliché.

    It turns out, no matter how much money a person makes, it is spent to create jobs for others, either through direct spending on products and services, or indirectly, through reinvestment in an economy. Ultimately, investment money ends up in the hands of entrepreneurs who use it to create or expand businesses to employ people. Even earnings on investments is reinvested to create even more jobs.

    And CEO pay helps an existing company run better and more competitively, so that people in that company get to keep their jobs.

  3. Patrick | February 27, 2014

    Wow!! with those average #'s it works out to 33 hrs a week that they work. So much for the statements by some elite that they work much harder than the average person.
    Over paid and underworked is shown there for sure!!

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