A new analysis finds chief executives of large companies made 262 times the average worker's annual pay in 2005.
By Jeanne Sahadi, CNNMoney.com senior writer
June 21, 2006: 5:47 PM EDT
NEW YORK (CNNMoney.com) – The top dogs at large companies make big bucks, no surprise. But it's always a little jolting to see just how big those bucks are relative to the paycheck of the average Joe.
Last year, the average CEO of a company with at least $1 billion in annual revenue made $10,982,000, or 262 times what the average worker made, according to an analysis by the Economic Policy Institute (EPI) released Wednesday.
Put another way, the average worker -- who earned $41,861 in 2005 -- made about $400 less last year than what the average large-company CEO made in one day. That assumes 260 days of pay (52 weeks x 5 days a week).
The CEO-to-worker pay differential in 2005 was the second highest on record. The highest was 2000, when the average CEO earned 300 times what the average worker made.
In 2002, the differential fell to 143 as the bear market took its toll on stock-related compensation.
Nevertheless, between 2000 and 2005, median CEO pay rose 84 percent to $6.05 million on an inflation-adjusted basis, according to EPI.
Median worker pay during the same period fell an estimated 0.3 percent to $33,852, based on BLS weekly earnings data. -
CNNMoney (Bold mine - DG)
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In a related note, the US House of Representatives today defeated a bill to raise minimum wage. In the nine years since the federal minimum wage was raised, Congress has voted itself nine pay hikes totaling nearly $35,000 a year, while a full-time minimum wage worker's annual pay has not budged from $10,712.
"The buying power of the federal minimum wage is currently at its lowest level in 51 years. Eighty-three percent of Americans favor an increase in the minimum wage (nearly half "strongly support" it). Yet, the House conservative leadership hasn't allowed a full floor vote on the minimum wage since the last increase went into effect, in 1997." -
AlterNetOn a news talk show tonight, I heard that 15 million citizens are getting minimum wage or less, and most of them asre single mothers. Could you raise a child on $10,712 a year?
