Companies and CEOs

November 23, 2016
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NEW YORK (TheStreet) - The average chief executive of an S&P 500 company makes 200 times more than its average worker and it's mainly consumer-facing companies with the biggest gaps, according to a new study by online jobs review site, Glassdoor.

The report, issued Tuesday, said CEOs of S&P 500 companies earned 204 times more than its average workers, but the top four CEOs earned more than 1, 000 times their average worker pay. Average CEO pay is $13.8 million a year compared to the average median worker pay of $77, 800 at the same companies, Glassdoor said.

Of the 10 companies with the highest CEO-to-worker pay ratios, eight of which are either retailers or restaurants, according to the data.

"The median pay at most of these companies is lower when compared to other industries, such as tech, finance or healthcare. In turn, since the median employee pay is lower, the ratio to CEO pay is typically going to be higher, " Glassdoor Chief Economist Dr. Andrew Chamberlain said in an email to TheStreet.

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Shareholder discontent over the growing gap between how much CEOs get paid compared to the average worker has been a source of consternation for years. Earlier this month, the Securities and Exchange Commission finalized a mandate from the 2010 Dodd-Frank financial reform law that will now require companies to provide more disclosure surrounding their chief executives' compensation - in this case the pay ratio between what the CEO makes and the average worker pay. The rules go into effect Jan. 1, 2017.

Several reports have already come out surrounding CEO-to-worker pay ratios. Bloomberg named McDonald's (MCD ) former chief Don Thompson (who stepped down in March 2015) as having the highest CEO-to-worker pay ratio at 644 to 1, in its report published Aug. 13. As well, salary tracker PayScale named CVS Health (CVS - Get Report ) Larry Merlo as having the worst pay ratio between upper management and the rank-and-file workers for 2013. Now, Glassdoor is taking a crack at it and the CEO with the highest pay ratio is neither of the two CEOs previously named.

Different methodologies used by each organization contributes to why the rankings are different - hence the need for the SEC to step in and make cogent rules about how these things are measured.

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