If there’s one thing that gets people more upset than high CEO pay, it’s when companies pay CEOs absurdly more than rank-and-file employees. Many big companies pay their CEOs 100 or even 300 times more than their typical workers. But the Wall Street Journal reports that one firm based in Ohio paid its CEO a whopping 935 times more than its median worker last year.
The company in question is Marathon Petroleum Corp., the second-largest oil refiner in the U.S., which paid CEO Gary Heminger $19.7 million last year. That is obviously an awful lot of money. Still, Heminger wasn’t even in the top 100 highest-paid CEOs in a recent list published by the AFL-CIO.
How, then, did Marathon Petroleum wind up with what the Journal called “one of the biggest contrasts” in CEO-to-worker pay? The landmark Dodd-Frank requires that public companies disclose their CEO-to-median-employee pay ratio to the Securities and Exchange Commission, and a firm’s ratio can be enormous if the CEO makes a fortune, the workers are paid a pittance, or both.
Marathon Petroleum’s ratio appears to extraordinarily high because many employees are part-timers at its Speedway gas station and convenience stores. Overall, median pay for Marathon workers appears to be about $21,000 per year, or more than 900 times less the company’s CEO. But if you exclude the Speedway workers, median pay at Marathon goes up to nearly $126,000 per year, according to the Journal, for a CEO-to-worker pay ratio of 156:1.
That is still quite a huge gap, but it seems to be fairly typical for large publicly traded companies. The data analytics firm Equilar recently surveyed 356 public companies, and found that the median CEO-to-median-worker pay ratio was 140:1.
What’s more, Marathon Petroleum doesn’t have the highest CEO-to-worker pay ratio we’ve ever heard of. That dubious distinction goes to Fresh Del Monte Produce. The global fruit-and-vegetable distribution company paid CEO Mohammad Abu-Ghazaleh $8.5 million last year.
That’s actually fairly modest as far as CEOs at large multi-national corporations. But as pointed out by Inequality.org, a website run by the progressive think tank the Institute for Policy Studies, 80% of Del Monte’s employees work in Costa Rica, Guatemala, Kenya, and the Philippines, and median pay for company employees is just $5,833 per year.
When you do the math, it shows that Del Monte’s CEO made an insane 1,465 times more than the company’s median worker.