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Tuesday, April 7, 2015

How Much Do CEOs Earn Per Hour?

Emeryville City Hall is considering raising the wage of the lowest paid workers to as much a $14.42 per hour for big businesses in town like Panera Bakery, Starbucks, Denny's, Baskin Robbins, I-HOP and Kentucky Fried Chicken (some of these Emeryville restaurants or their parent companies are highlighted in yellow below). How does that stack up against the CEO's of these corporations?   USA Today has assembled a compilation of several CEO pay to get an idea:

Maximum Wage! How much CEOs earn an hour


Getting paid $10-an-hour is a welcome lift for Walmart (WMT) and McDonald’s (MCD) workers. But compare that with what the average restaurant and retail CEOs earn.
The 13 CEOs of a group of well-known retailers and restaurants haul in an average $5,859 an hour according to a USA TODAY analysis of data from S&P Capital IQ. Putting that another way: It would take an employee making $10 a hour more than two months working each day to earn as much as the average CEO in these industries make in a single hour. The analysis assumes a 40-hour-a-week schedule and uses total reported pay by the companies in the most recent proxy statements, which for some companies is 2014, but for some others is still 2013. Total pay includes salary but also stocks awards and bonuses.
CEO pay will be on top of investors’ minds this week as more proxy statements pour in from companies. These documents show investors how much they’re paying the top management. CEO pay is an annual source of angst for investors who, on one hand, are willing to pay managers whatever it takes to get good results, but at the same time can’t help but puzzle over the seemingly non-stop march of CEO pay higher.
This year stands to be even more charged as there’s pressure for restaurants and retailers to boost wages to hourly employees. Rising hourly pay at Walmart, McDonald’s and Target (TGT) – all announced this year – stand to drive a critical cost for all these companies higher. The raises also draw greater attention to pay disparity. Neither Target nor McDonald’s CEOs’ pay were included because their current CEOs haven’t served a full year yet.
It’s still early in the proxy season – and many companies haven’t reported CEO pay for 2014, yet. Walmart, for instance, hasn’t reported fiscal 2015 pay yet (so fiscal 2014 pay through January 2014 was included in this analysis).
No one expects a line cook or a retail clerk to earn as much as the CEO. And it’s quite possible CEOs put in more than 40 hours a week (statistics on a 60-hour workweek are also included in the chart below). But the attention to rising wages will certainly again turn a spotlight on how much the people at the top of these companies are earning.
The biggest CEO payout – by far – goes to the co-CEOs of Chipotle Mexican Grill (CMG). Montgomery Moran and Steven Ells, co-CEOs, pulled down more then $13,000 a hour apiece. Compare that with the average $9.15 an hour paid to Chipotle crew members, according to Glassdoor.com. It would be very difficult for investors to complain too much, though, since shares of Chipotle gained 29% in 2014 and is the fast-casual concept to beat this year.
Over at Wal-Mart, CEO Michael Duke earned what amounted to $2,704 a hour during the company’s most recently reported proxy for the fiscal year ended in January 2014. That ranks him below well below average among the retailers and restaurants analyzed – which includes some fiscal 2014 and 2015 years. But even at that total pay, it would take the typical Wal-Mart worker more than a month working every day to earn as much as Duke makes in an hour. Wal-Mart typically files its annual proxy statement at the end of April.
Again, it cannot be stressed enough this analysis doesn’t even remotely assert CEOs should be paid closer to $10 an hour. Few compensation experts or even investors would agree with that.
But investors are constantly looking for ways to put wages and pay into context – which will be especially true this year and especially in these industries. Looking at CEO pay per hour helps investors gain some perspective during proxy season when evaluating CEO’s eye-popping pay packages.
HOURLY PAY FOR CEOS AT KEY RETAILERS AND RESTAURANTS
CompanySymbolCEOPay per hour (40 hrs./wk)Pay per hour (60 hrs./wk)
ChipotleCMGMontgomery Moran$13,489$8,993
ChipotleCMGSteven Ells$13,471$8,981
StarbucksSBUXHoward Schultz$10,285 *$6,857 *
Macy’sMTerry Lundgren$7,904 *$5,269 *
Dunkin BrandsDNKNNigel Travis$4,889$3,260
YUM BrandsYUMDavid Novak$4,795$3,196
J.C. PenneyJCPMyron Ullman$4,629$3,086
Wendy’sWENEmil Brolick$3,645 *$2,430 *
DominosDPZPatrick Doyle$3,571$2,381
DineEquityDINJulia Stewart$2,766 *$1,844 *
SearsSHLDEdward Lampert$2,766$1,821
Wal-MartWMTTerry Duke$2,704$1,803
Panera BreadPNRARonald Shaich$1,292 *$862 *
Sources: S&P Capital IQ, USA TODAY research, based on 40 and 60-hour workweek and 52.2 weeks per year, total reported pay from most recent proxy
* most recent proxy end date is prior to Dec. 2014
** excludes Target and McDonald’s since current CEOs have served less than a year

3 comments:

  1. Brian, As long as you continue to compare "Apples to Apples", you will be doing our community a service. But when your reports begin to stray into unfounded emotion, you lose all credibility. Keep up the good work!

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    Replies
    1. Your unfounded emotion is someone else's common sense.

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