A group of US chief executive officers earned 140 times more last year than the median workers at their companies, according to a survey that gives a first glimpse of newly required pay ratio disclosures.
Workers at the 356 public companies included in the study received $60,000 in median compensation, Equilar said in the report released Thursday, which didn't include CEO pay figures.
Thousands of US companies will reveal the ratio for the first time in coming months, required as part of the 2010 Dodd-Frank Act. Supporters of the rule hope it will highlight growing income inequality and force corporate boards to rein in excessive executive compensation. Critics see the provision as a populist measure intended only to shame CEOs, saying it's costly to calculate and difficult to compare from one industry to the next.
"Since half of a company's employees are being paid less than the median, a big concern is that internal conversations at the water cooler will lead to a decrease in morale across the business," said Nathan O'Connor, a managing director at Equity Methods, which helps companies calculate the ratio. Still, preparing the figure has helped many firms get a better sense of their pay equity and differences in regional compensation, he said.
Consumer-discretionary businesses included in the study reported a median pay ratio of 350-to-1, the biggest among all industries, while the energy sector's earnings gap of 72-to-1 was the smallest. The findings were reported earlier Thursday by the Wall Street Journal.