23 December 2011

Big Gap in the Pay Ratio between CEOs and Other Employees

CEOs of the Fortune 50 companies reportedly earn on average of 213 times more than their typical workers. Following the U.S. trend, India is not behind to pay huge amount to CEOs. According to the early study by Economic Times found top Indian companies pay their CEOs an average of 68 times than its employees. Fortune 50 CEOs list brings out the list for the biggest ratio of CEO pay vs. typical employee payment. CEO of UnitedHEalth Group, Stephen J. Hemsley topped the list by his take home package that is 1,731 times more than a typical worker.
CEOs pay

The top listed company in the Fortune Global 500, Wal-Mart Stores placed second in the highest ratio rank between CEOs and other workers. Michael T. Duke gets 717 more than on average of other employees’ pay.  Duke, the CEO of Wal-Mart is paid $16,270,000 whereas the employee average salary is $22,700.  If Steve Jobs was alive, he would have found his name as the least paid CEO as his annual salary was $1. Here, it is Warren Buffett (the CEO of Berkshire Hathway) the least paid CEO in the Fortune 50 list. His compensation ratio is 10:1, comparing the average of other employee pay.

In the Fortune 50 CEOs, two Indians also got their names for getting highest ratio payment. The Chennai-born Indra Nooyi, CEO of PepsiCo, was listed at the 10th place with a ratio of 322:1. Another Indian born American Executive, Vikram Pandit, the CEO of Citigroup tops in the 36th position in the list. He bags a ratio of 17:1.

Where in India, the highest ratio of the CEOs pay vs. worker pay list found Jindal Steel & Power Executive Vice-chairman and MD, Naveen Jindal taking 2000 times than the average salary of the employees.  Kalanithi Maran, the Chairman and MD of Sun TV spot the second place among highest paid chief executive list of Indian Companies with  1,760 times than the average pay of a Sun TV employee. It is the CEO of IDFC, Rajiv Lall who is paid just three times more than the average remuneration to other employees. Wipro Chairman and MD, Azim Premji earns 93 times more than the average package to other employees.