We use cookies to collect information about how our website is used and to improve the visitor experience. You can change your browser’s cookie settings at any time. Please review our privacy policy for more information. OK
Perhaps one of the longest talked about topics in equity and executive compensation circles has been the anticipated CEO Pay Ratio disclosure. So, with over 1,000 companies having filed their pay ratio disclosures to date, what are we learning from the disclosures?
The median pay for employees overall is higher than many compensation experts expected (about 75k, but this varies significantly among industries and company sizes). Leading up to the disclosures, there was concern that if median pay was low and pay ratio high, there would be large scale morale issues once employees came to realize how little their pay is relative to the CEO. With the median pay coming in higher than expected in most cases, does that mean employee morale is no longer a concern?
Actually, as Deb Lifshey of Pearl Meyer points out in her blog “Median Employee Pay Not Quite the Spectacle Anticipated” (March, 2018), “The flip side of what appears to be a relatively high average median employee pay figure is the fact that half of a company’s population will now perceive themselves as being paid less than their peers. If they believe they are paid less than median, it may impact productivity and job satisfaction and even lead to retention issues. The problem is compounded this year if these workers understand that corporate tax cuts led to a windfall for their employer, which may not have been shared among employees.”