Two Triad CEOs in top 10 ranking of compensation compared with median employee

Two Triad corporations are in the top 10 of a controversial ranking of annual chief executive compensation compared with the median company employee.

A report released Wednesday by Rep. Keith Ellison, D-Minn., is titled “Rewarding or Hoarding?” It reflects a new Dodd-Frank regulatory act requirement that went into effect in 2017.

The ranking is based on the first 225 of the Fortune 500 corporations to put a number and a ratio to the compensation gap between chief executives and their median employee salary. Median is defined as the middle value in a list of numbers.

Hanesbrands Inc. of Winston-Salem and VF Corp. of Greensboro are ranked seventh and 10th, respectively.

Topping the list is Mattel with a CEO pay ratio of $4,987 to $1, reflecting its top chief executive making $31.27 million in fiscal 2017 while its median worker pay was $6,271. The company has 28,000 employees.

Overall, the report finds the average CEO-to-worker pay ratio was 339:1. For 188 of the companies, a single CEO’s pay could be used to pay more than 100 workers.

According to the report, the median worker at 219 companies would need to work at least a 45-year career to earn what their CEO makes in a single year.

“It is important to remember that many CEOs and top executives didn’t want to release this data, and now we know why,” Ellison said.

Some pro-business groups, such as the U.S. Chamber of Commerce and National Retail Federation, fought efforts to disclose the CEO pay ratio.

The retail trade group calls the ratio “a flawed measure that unfairly singles out industries, like retail, that have high percentages of part-time, seasonal and entry-level employees.”

“For retail, the median wage will appear artificially low,” the federation said.

The U.S. Chamber of Commerce has referred to the reporting requirement of the CEO pay ratio as an example of an unnecessary financial burden to corporations.

“The median worker at the vast majority of these companies wouldn’t make in an entire 45-year career — and in many cases, multiple careers — what their CEO makes in a single year,” Ellison said.

“This immense inequality is a crisis for our economy and our democracy, and we need legislative action at the local, state and federal level to address it.”

The 225 companies in the report database employ more than 15 million workers.

For some corporations, particularly those that have a significant number, if not the bulk, of their employees working offshore, the gap between the chief executive to median employee pay ratio is especially far apart.

For example, the total compensation for Hanesbrands chief executive Gerald Evans Jr. was $9.58 million in 2017. Although Evans was paid $1.1 million in salary, the bulk of his compensation was $6.25 million in stock awards. Those awards are accounted for and payable over multiple years, but they have to be declared annually.

By comparison, Hanesbrands reported to shareholders that the median annual employee compensation was $5,237 for its nearly 67,200 employees.

That means Evans’ pay ratio equals out to $1,830 in total compensation for every $1 earned by the median employee, as well as Evans receiving $210 in salary for every $1 earned.

About 88 percent of Hanesbrands’ employees work outside the United States, including 55,000 employees employed in its supply-chain facilities in Central America, the Caribbean Basin and Asia.

Hanesbrands explained in the CEO pay-ratio section of the filing that “our various compensation programs include the payment of market-based wages and the provision of competitive employee benefits. The programs vary from region to region.

“We estimated that for 2017, our global median employee was an equipment operator located in a supply chain facility in Honduras,” it said.

VF chief executive Steven Rendle received total compensation of $13.74 million, representing a ratio of $1,353 for every $1 paid to a median employee making $10,151 annually. The Rendle salary ratio was $108.07-to-$1.

VF said its pay ratio includes 56,941 global full-time, part-time, temporary and seasonal employees.

“Approximately 25 percent of our population works part time,” VF said. “Our median employee was one of those individuals — a part-time, retail associate who was attending a local college.”

Other ranked corporations with a significant Triad or North Carolina presence include: 30th, Lowe’s Cos Inc. (CEO pay ratio $469 to $1, or $11.2 million CEO compensation to $23,905 median employee); 64th, Wells Fargo & Co. ($291 to $1, or $17.5 million to $60,446); 65th, Laboratory Corp. of America ($280 to $1, or $11.6 million to $41,609); 81st, Bank of America Corp. ($250 to $1, or $21.8 million to $87,115); 94th, General Dynamics ($218 to $1, or $21.5 million to $98,563); tied for 97th, Caterpillar Inc. ($213 to $1, or $14 million to $65,770); 106th, PNC Financial Service Group Inc. ($201 to $1, or $13.92 million to $69,190); 108th, American Airlines Group ($195 to $1, or $12.2 million to $62,394); 118th, Duke Energy ($175 to $1, or $21.4 million to $122,365); 141st, BB&T Corp. ($150 to $1, or $12.7 million to $84,550); 156th, Nucor Corp. ($133 to $1, or $12.1 million to $90,535).

This post was originally published here via Google News