By Michelle Leder June 1, 2021,
Companies were right to fear pay-ratio disclosure. It's embarrassing.
Chipotle recently became the latest company to voluntarily raise worker pay, announcing that many of its 76,000 hourly employees would get a bump to $15 an hour. This occurred shortly after the company disclosed that CEO Brian Niccol had made nearly 3,000 times the median employee salary in 2020, up from 1,136 times in 2019 and among the top ten highest pay ratios among companies in the Russell 3000 stock index, according to research firm Equilar.
Coincidence? Or is the pay bump for the rank and file a sign that the most highly compensated senior executives are starting to feel a tinge of shame?
For the past four years, the Securities and Exchange Commission has required publicly traded companies to disclose something called the CEO pay ratio -- the amount the CEO receives in relation to the annual salary of the median employee. At many companies, especially large companies with thousands of low paid workers (think retailers, restaurants and tourism), it's not uncommon to see a number like Niccol's, with the CEO making more than a thousand times the salary of the median employee. According to Equilar, there are 57 such companies in the Russell 3000. Auto-parts company Aptiv PLC topped the list: CEO Kevin P. Clark's total 2020 compensation of $31 million was more than 5,000 times that of its median employee, who made less than $6,000, according to Aptiv's proxy.....
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