By Dr. Tim Sandle
Published
April 13, 2023
Offices in London. Image by © Tim Sandle
With wage gaps between the rich and poor becoming ever more apparent worldwide, it is a symptom of the economic system that drives some business owners to consider widening the ratio between the pay of the ‘top dogs’ and the ‘worker bees’.
How much should a CEO earn in comparison to their employees? Why do some CEOs take home such massive salaries while their employees face financial difficulties? And which businesses have the greatest pay gap between CEOs and employees? These are not easy questions to answer and any answer will depend upon the economic model subscribed to.
To explore this topic, the firm Switch On Business analysed the difference in wages between CEOs and employees in some of the U.S.’s largest businesses. This produced one startling statistic: It would take the average employee at Amazon over six millennia to earn what Andrew Jassy earns in 1 year. Moreover, Jassy’s yearly salary could pay medical insurance for 19,806 people in the U.S.
Such is the extent of the disparity between executives and their workers that Airbnb was found to be the only company with a 1:1 pay ratio. Here the CEO earns $202,541 per year and workers $16,878 monthly.
Amazon has the biggest annual salary disparity between the CEO and average employees. In 2021, Amazon’s CEO Andrew Jassy took home an annual salary of $212,701,169 while the average employee was paid $32,855. This is a pay ratio of 6474:1.
McDonald’s has the second largest pay gap, with employees needing just over 2,251 years to earn what CEO Christopher Kempczinski does in just one year. This is followed by TJX companies where it would take the average worker over 2,249 years to match the CEO’s annual pay, and Oracle where it would take more than 1,841 years.
The table below shows the top five companies where it would take median pay earners the longest time to earn what their CEO makes in just one year:
Offices in London. Image by © Tim Sandle
With wage gaps between the rich and poor becoming ever more apparent worldwide, it is a symptom of the economic system that drives some business owners to consider widening the ratio between the pay of the ‘top dogs’ and the ‘worker bees’.
How much should a CEO earn in comparison to their employees? Why do some CEOs take home such massive salaries while their employees face financial difficulties? And which businesses have the greatest pay gap between CEOs and employees? These are not easy questions to answer and any answer will depend upon the economic model subscribed to.
To explore this topic, the firm Switch On Business analysed the difference in wages between CEOs and employees in some of the U.S.’s largest businesses. This produced one startling statistic: It would take the average employee at Amazon over six millennia to earn what Andrew Jassy earns in 1 year. Moreover, Jassy’s yearly salary could pay medical insurance for 19,806 people in the U.S.
Such is the extent of the disparity between executives and their workers that Airbnb was found to be the only company with a 1:1 pay ratio. Here the CEO earns $202,541 per year and workers $16,878 monthly.
Amazon has the biggest annual salary disparity between the CEO and average employees. In 2021, Amazon’s CEO Andrew Jassy took home an annual salary of $212,701,169 while the average employee was paid $32,855. This is a pay ratio of 6474:1.
McDonald’s has the second largest pay gap, with employees needing just over 2,251 years to earn what CEO Christopher Kempczinski does in just one year. This is followed by TJX companies where it would take the average worker over 2,249 years to match the CEO’s annual pay, and Oracle where it would take more than 1,841 years.
The table below shows the top five companies where it would take median pay earners the longest time to earn what their CEO makes in just one year:
Company Average annual employee salary Average annual CEO salary Pay ratio
| Company | Average annual employee salary | Average annual CEO salary | Pay ratio | How many years of annual median pay to reach CEO annual pay | |
| 1 | Amazon | $32,855 | $212,701,169 | 6,474:1 | 6473.9 |
| 2 | McDonald | $8,897 | $20,028,132 | 2,251:1 | 2251.1 |
| 3 | TJX Companies | $14,139 | $31,802,000 | 2,249:1 | 2249.2 |
| 4 | Oracle | $75,043 | $138,192,032 | 1,842:1 | 1841.5 |
| 5 | Coca-Cola | $13,894 | $24,883,878 | 1,791:1 | 1791.0 |
How many years of annual median pay to reach CEO annual pay
In terms of which CEOs earn the equivalent of a median worker’s annual pay in the shortest amount of time, it is no surprise, based on the above, to learn that Amazon’s CEO Andrew Jassy tops the list, earning the average Amazon employee’s annual salary in as little as one hour and 18 minutes.
In response to the Switch On Business report, an Amazon spokesperson has told Digital Journal: “In accordance with SEC rules, Andy’s reported compensation for 2021 included the full value of an RSU award of 61,000 shares (pre- stock split), despite the fact that the award was designed to vest over 10 years starting in 2023, with the majority scheduled to vest between 2026-2031. A more accurate calculation of his 2021 compensation includes $43.4M in shares vested in 2021, a salary of $175,000, and security/401K contribution of $593,000.”
McDonald’s CEO Christopher Kempczinski and TJX CEO Ernie Herrman follow, both earning the average worker’s yearly salary in just under four hours.
Rank
Company Medical cost Employee VS CEO
Medical cost ratio based on average of $10,739 Percentage of CEO’s annual salary How many people the CEO could pay annual medical cost for
The above data demonstrates the persistent, indeed deepening, income inequality among the biggest U.S. companies and their workforces.
In terms of which CEOs earn the equivalent of a median worker’s annual pay in the shortest amount of time, it is no surprise, based on the above, to learn that Amazon’s CEO Andrew Jassy tops the list, earning the average Amazon employee’s annual salary in as little as one hour and 18 minutes.
In response to the Switch On Business report, an Amazon spokesperson has told Digital Journal: “In accordance with SEC rules, Andy’s reported compensation for 2021 included the full value of an RSU award of 61,000 shares (pre- stock split), despite the fact that the award was designed to vest over 10 years starting in 2023, with the majority scheduled to vest between 2026-2031. A more accurate calculation of his 2021 compensation includes $43.4M in shares vested in 2021, a salary of $175,000, and security/401K contribution of $593,000.”
McDonald’s CEO Christopher Kempczinski and TJX CEO Ernie Herrman follow, both earning the average worker’s yearly salary in just under four hours.
Rank
Company Medical cost Employee VS CEO
Medical cost ratio based on average of $10,739 Percentage of CEO’s annual salary How many people the CEO could pay annual medical cost for
| Rank | Company | Medical cost | Employee VS CEO | |
| Medical cost ratio based on average of $10,739 | Percentage of CEO’s annual salary | How many people the CEO could pay annual medical cost for | ||
| 1 | Amazon | 3.05940962845703:1 | 32.69% | 19,806 |
| 2 | Intel | 9.72157556569513:1 | 10.29% | 16,630 |
| 3 | ServiceNow | 21.7766086227768:1 | 4.59% | 15,439 |
| 4 | Oracle | 6.98789458981283:1 | 14.31% | 12,868 |
| 5 | Apple | 6.35571282242295:1 | 15.73% | 9,194 |
The above data demonstrates the persistent, indeed deepening, income inequality among the biggest U.S. companies and their workforces.
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