This is a rather amusing point being made by Mark Perry over the Pond. CEOs actually make, on average, rather less than doctors do. This is, as you will clearly note, not the usual story we get told about our times:
It should be noted that USAToday’s analysis includes the CEOs of only 200 of America’s largest multinational companies in the S&P500. According to the US Census, there are more than 27 million private firms in the US, so the 200 firms reported by USAToday represent only one of every 135,000 private firms in the US, or 0.00074% (less than 1/1000 of 1%). Note also that USAToday compares the annual wages of ALL full-time employees working at more than 27 million companies to the CEO pay of executives at only 200 companies.
We can get a more accurate and complete picture of CEO compensation by looking at wage data just released by the Bureau of Labor Statistics in its annual report on Occupational Employment and Wages for 2013. The BLS report provides “employment and wage estimates by area and by industry for wage and salary workers in 22 major occupational groups,” including the category “chief executives.” In 2013, the BLS reports that the average pay for America’s 248,760 chief executives was only $178,400. The 200 S&P500 firms reported by USAToday represent only one out of every 1,243 firms in the country that have a CEO at the head, and that small sample of 200 would represent only 0.08% of American CEOs, or less than one-tenth of one percent of all CEOs. The larger sample of CEOs reported by the BLS gives us a much better understanding of “average CEO compensation.”
That some CEOs make those very large multiples of the average wage is entirely true. But in the US economy it’s a vanishingly small percentage of those who do that job. And it is worth noting that that average CEO pay is, in hte US context, about that of a dentist and rather lower than the average doctor.
It wouldn’t surprise me at all if this were true here in the UK as well. GPs are, as we know, on a pretty good deal these days. £110,000 a year is commonplace, earned without really breaking into a sweat in that job. And it wouldn’t surprise me, as I say, if the average CEO (or perhaps Managing Director we might say here) pay in the UK was below that.
Which leads to an interesting question. Do we actually collect the statistics that would allow us to prove this?