The Washington Post: The CEO of your company has probably already earned your 2016 salary this year

Ian Pajer-Rogers |

From The Washington Post:

by Philip Bump

About an hour after the sun rose for the first time over Bentonville, Ark., in 2013 -- at 8:30 a.m. on Jan. 1 of that year -- Michael Duke, then-CEO of Walmart, had earned as much as a typical employee of his company would earn over the next 364 days.

That's an estimate, of course. Duke wasn't getting checks every half hour (we assume), and that determination is made by comparing his salary to the Walmart median, as determined by Payscale.com. Duke's 2013 pay is also an extreme example of the split between executive salaries and those of the employees they manage.

But it's also likely the case that, if you work for a large company, your CEO has already or will soon have already pocketed your annual salary, less than a week into 2016. With income inequality a hot topic on the campaign trail, we figured this was worth putting into context.

There are a few ways to look at it. The left-leaning Economic Policy Institute regularly calculates the ratio between executive and median-employee pay -- a ratio that has changed dramatically over the years.

In 1965, CEOs made 20 times the salary of an average, non-management employee (we're using the mean here, not the median, as we did above). That means that a CEO would have earned his employee's salary by Jan. 19, at about 7 a.m.

By 1978, CEOs were making just less than 30 times the average employee. He or she (he) would have earned the average salary by Jan. 13, at about 6 a.m.

Then things got crazy. In 1989, CEOs made 58.7 times their employees, pulling in the average income by Jan. 7. In 1995, it was 71.6 times, meaning that by about midnight on Jan. 4, a CEO had earned an average employee's annual salary.

The most recent figure from EPI is for 2014. That year, CEOs earned 303 times as much as the average, non-management employee. Before the sun rose on Jan. 2, he or she had earned that employee's salary.

Read the full article from The Washington Post.