JOHN CURLEY AND SHARI ELLIKER

Washington CEO pay is upwards of 400 times more than employees

Jul 23, 2018, 4:05 PM

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Amazon CEO Jeff Bezos. (File, Associated Press)

(File, Associated Press)

As of last year, federal laws now require companies to disclose the difference in average pay between CEOs and employees. The first set of numbers are now in, and not surprisingly, they make a lot more money. We probably could have guessed that without the law.

The data shows that CEOs can often make upwards of 200 to 400 times workers’ median annual pay, reports The Seattle Times. “I don’t know if it’s considered outrageous,” said KIRO Radio’s Tom Tangney. “But it’s an eye-opening discrepancy between what the CEO makes and what the average employee makes.”

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Leading the companies with the highest ratio of CEO to median employee pay is Expedia, coming in at 431 to 1, in which CEO Mark Okerstrom 2017 income was $30.72 million. That’s about $30 million more than median employee pay of $71,696. T-Mobile’s ratio is 424 to 1, followed by TrueBlue at 416 to 1.

“Who came out smelling like roses in this one?” joked KIRO reporter Mike Lewis. “Amazon. Jeff Bezos is the richest man in the universe, but he doesn’t collect much in pay. He collects about a million and something in pay, which would put in him the lowest end of the spectrum in Seattle.”

“But he has a lot of stock. That’s where this all gets confusing because how do you decide what actual pay is?”

Therein lies the issue with data. While it provides a slight picture of income differences, many of these companies have seasonal and part-time employees on the payroll, which can throw off the ratio. And stock is not taken into account as well.

CEO pay ratio offset by sometimes muddy data

“What it reveals is so mushy in the end,” Tom said. “It’s like when the body measure index came out. That’s so bogus because you don’t make a distinction between fat and muscle. The way these divisions of labor happen, I don’t know how valuable this information is.”

Of the Northwest public companies, Tableau Software had the highest median pay at $199,864 and retailer Zumiez the lowest at $6,997, according to data from the The Seattle Times and research firm Equilar.

When the law was initially passed, advocates claimed the disclosed pay disparities would help the public better understand income inequality. Critics believed the cloudy nature of the figures would result in little useful data. Both viewpoints remain the same now that the numbers are out.

But Mike still sees some value in the information and the reasoning behind the legislation. “In the 1960s, you’re talking a ratio of 35 to 1; in other countries you’re talking 50 to 1; and in the United States you have companies at a 1,000 to 1, which has always been a little bit obscene.”

“This was also a reaction to overcompensated CEOs whose companies were losing money. That was the kernel of irritation that grew into this legislation, especially when you have taxpayer subsidized companies where the CEO is making a lot of money, or bailing out CEOs who are making a lot of money at that 400 to 1 ratio.”

John Curley and Shari Elliker on KIRO Newsradio 97.3 FM
  • listen to tom and curleyTune in to KIRO Newsradio weekdays at 3pm for John Curley and Shari Elliker.

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Washington CEO pay is upwards of 400 times more than employees