CEOs near record on pay ratios

CEOs near record on pay ratios 1Last year was a very good year to be an average CEO.

A typical chief executive at a U.S. company earned 262 times the pay of a typical worker in 2005, according to a recent report.

With 260 workdays in a year, that means that an average CEO earned more in one workday than a worker earned in 52 weeks.

That pay gap is the second-highest in the 40 years for which data are available, reports the Economic Policy Institute, a Washington-based think tank.

American CEOs fared even better in 2000, when they made an average of 300 times the salary of their workers.


Executive pay has become a hot-button issue with shareholders around the country.

A study released earlier this year by the Corporate Library — and titled “Pay for Failure” — singled out some of the corner suite’s worst offenders. Among them: Pfizer (PFE, news, msgs) CEO Henry McKinnell; Merck (MRK, news, msgs) former CEO Raymond Gilmartin; and AT&T’s (T, news, msgs) Edward Whitacre.

Blame the ’90s
The triple-digit pay ratios originate in the mid-1990s, when CEOs first out-earned workers by a 100-to-1 ratio.

Back in 1965, U.S. CEOs in major companies earned 24 times more than an average worker; this ratio grew to 35 in 1978 and to 71 in 1989.
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