About an hour after the sun rose for the first time over Bentonville, Ark., in 2013 -- at 8:30 a.m. on Jan. 1 of that year -- Michael Duke, then-CEO of Walmart, had earned as much as a typical employee of his company would earn over the next 364 days.
That's an estimate, of course. Duke wasn't getting checks every half hour (we assume), and that determination is made by comparing his salary to the Walmart median, as determined by Payscale.com. Duke's 2013 pay is also an extreme example of the split between executive salaries and those of the employees they manage.
But it's also likely the case that, if you work for a large company, your CEO has already or will soon have already pocketed your annual salary, less than a week into 2016. With income inequality a hot topic on the campaign trail, we figured this was worth putting into context.
There are a few ways to look at it. The left-leaning Economic Policy Institute regularly calculates the ratio between executive and median-employee pay -- a ratio that has changed dramatically over the years.
In 1965, CEOs made 20 times the salary of an average, non-management employee (we're using the mean here, not the median, as we did above). That means that a CEO would have earned his employee's salary by Jan. 19, at about 7 a.m.
By 1978, CEOs were making just less than 30 times the average employee. He or she (he) would have earned the average salary by Jan. 13, at about 6 a.m.
Then things got crazy. In 1989, CEOs made 58.7 times their employees, pulling in the average income by Jan. 7. In 1995, it was 71.6 times, meaning that by about midnight on Jan. 4, a CEO had earned an average employee's annual salary.
The most recent figure from EPI is for 2014. That year, CEOs earned 303 times as much as the average, non-management employee. Before the sun rose on Jan. 2, he or she had earned that employee's salary. (That didn't change much from 2013.) But 2014 wasn't the peak. The peak was in 2000, when the average CEO earned his average employee's salary before Jan. 1 was even over.
We can get more specific. According to the most recent data from Payscale, here's when CEOs of top companies earned a median employee's salary this year. (For the best-paid bosses, it has already happened.)
|Company||CEO pay versus median||When CEO earned median salary|
|CVS Caremark||422 times||Jan. 1, 8:48 p.m.|
|Goodyear||323 times||Jan. 2, 3:12 a.m.|
|Walt Disney||283 times||Jan. 2, 7:00 a.m.|
|21st Century Fox||268 times||Jan. 2, 8:48 a.m.|
|Honeywell||211 times||Jan. 2, 5:36 p.m.|
|Boeing||198 times||Jan. 2, 8:24 p.m.|
|Altria||175 times||Jan. 3, 2:12 a.m.|
|Aflac||157 times||Jan. 3, 7:54 a.m.|
|Deere||150 times||Jan. 3, 10:36 a.m.|
|FedEx||145 times||Jan. 3, 12:36 p.m.|
You're probably wondering about two other CEOs. First, there's Warren Buffett of Berkshire Hathaway. He makes a (relatively modest) nine times his median employee's salary, meaning that he will have earned that much by Feb. 10 of this year. The other is Amazon's Jeff Bezos, the guy who owns The Washington Post. The most recent data from Payscale is from 2013, when he made 18 times his median (Amazon) employee. If that ratio still holds, he'll make an average employee's salary by Jan. 21 at 8 a.m.
The Bureau of Labor Statistics, by the way, has a different set of numbers on average pay and chief executive pay. Those who fit the government's definition of a "chief executive" ("Plan, direct, or coordinate operational activities at the highest level of management with the help of subordinate executives and staff managers") earned $180,700 as of May 2014 -- 3.8 times that of the average worker ($47,230). By that standard, a BLS chief executive will not earn an average salary until April 6.
One more comparison. The chief executive of the United States -- that is, Barack Obama -- earns $400,000 a year and gets a $50,000 expense account. That means he makes 9.5 times the annual mean wage, and will have earned the median American salary on Feb. 8 of this year, shortly after noon. Not bad money. Not CEO-circa-2000 money, or Walmart-CEO-in-2013 money, but not bad regardless.
Current data is not available for Donald Trump, the one presidential candidate for whom the presidency is a distinct pay cut.