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For most women, a 15 percent pay cut could mean a complete change in lifestyle. No more dining out. No more splurges on tattoos. No more organic. And definitely no more same-day delivery.
But what does losing 15 percent of your pay mean if you’re one of America’s top business CEOs?
According to an Equilar report covered in the New York Times, “the average compensation among the top executives in 2015 was down 15 percent from the 2014 figure of $22.6 million.” On average, this salary dropped down to $19.3 million.
Last year, the top-earning CEO, Dara Khosrowshahi of Expedia, earned $94.6 million while the lowest factored CEO, Christopher J. O Connell of Waters, raked in a solid $12.2 million.
But what exactly does this mean for executive pay? As the Times asks, does this mean that they’ve reached their cap? Are there only so many millions to go around?
The answer is sort of, but not exactly.
As expert Kenneth Daly, chief executive of the National Association of Corporate Directors, tells the Times, more executives are reaching a place of moral, logical power when it comes to compensation and absolute pay. In his words, “They seem to have a lot more steel in their backs.”
Which doesn’t exactly look like the case when looking at how much more these CEOs earn compared to their average worker. This disparity continues to grow as the years pass. In “1989, chief [executives] were making 59 times what their average workers made; by 2000, they were making 383 times what the average workers made.” Today, they are earning 523 times more.
The biggest gap is evident with Expedia CEO, Mr. Khosrowshahi, who earned 993 times of the average pay of his employees.
So while these chief executives did take an average 15 percent pay cut last year, it’s clear that they are still doing very well and are likely to continue doing so. As director of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) investment office, Heather Slavkin Corzo, affirms, “The amount of power that we’ve allowed to be concentrated in the hands of CEOs is worrisome.” And the only way to shift that power is by modifying “the power structures in corporate America.”
