Last week, I shared an infographic about outrageous CEO compensation here on Women on Business, and today, I received an incredibly insightful email about that infographic from Dr. Jane Karwoski, host of The Social Network Show and adjunct professor of psychology for the University of Nevada, Las Vegas.
Jane dug into the numbers a bit further and sent me the following message, which she kindly gave me permission to publish here:
“It appears at first glance that John H. Hammergren of McKesson is the outlier in this group, with 2.7 times the compensation of the next most highly rewarded exec, Ralph Lauren. However, when you compare compensation as a percentage of the company’s revenue, an entirely different picture emerges.
“The true outlier by that standard is Michael D. Fascitelli of Vornado Realty Trust who is receiving 2.4% of revenue. Lauren comes in next, with not quite 1%.
“Even by this measure, Hammergren makes 2.5 to 3 times what the CEOs of the other three largest revenue companies receive. But if McKesson were rewarding him with the same percentage of revenues as Vornado pays Fascitelli, he’d be receiving $2.67 billion in compensation annually!”
Take a look at Jane’s chart of salaries for all of the details and view the original infographic that sparked this anaylsis here:
What do you think of CEO salaries looking at them from this perspective? Leave a comment and share your thoughts below.
Special thanks go to Jane Karwoski, PhD, LMSW, for sharing this analysis with Women on Business.
Susan Gunelius
Susan Gunelius is the Founder and Editor-in-Chief of Women on Business. She is a 30-year veteran of the marketing field and has authored a dozen books about marketing, branding, and social media, including the highly popular Ultimate Guide to Email Marketing, 30-Minute Social Media Marketing, Content Marketing for Dummies, Blogging All-in-One for Dummies and Kick-ass Copywriting in 10 Easy Steps. Susan’s marketing-related content can be found on Entrepreneur.com, Forbes.com, MSNBC.com, BusinessWeek.com, and more. Susan is President & CEO of KeySplash Creative, Inc., a marketing communications company. She has worked in corporate marketing roles and through client relationships with AT&T, HSBC, Citibank, Intuit, The New York Times, Cox Communications, and many more large and small companies around the world. Susan also speaks about marketing, branding and social media at events around the world and is frequently interviewed by television, online, radio, and print media organizations about these topics. She holds an MBA in Management and Strategy and a Bachelor of Science degree in Marketing and is a Certified Professional Career Coach (CPCC).
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What an excellent analysis by Dr. Karwoski on the solid foundation of over compensation of CEO’s–to the detriment of the individual company–individuals and on society.
I agree, Jim!
Thanks for updating us Susan! I still believe CEO’s are making outrageous salaries even with the few outliers. Who needs that amount of money. Great post.
I just saw “5 Richest Women” at http://tinyurl.com/investopedia-5richestwomen, then realized the numbers are over a year old. But maybe things don’t change that fast up in the stratosphere, because some very recent blogs here and there are still using it. Regardless, Christy and Alice Walton (daughter-in-law and daughter of founder Sam) were listed #1 and #2. Apparently, just the dividends generated by their combined wealth ($25.3 B + $23.3 B as of May 2012, according to Investopedia) can amount to over $750 mil/year. Really makes me wonder how it is that Wal-Mart is always on the carpet for allegedly unfair practices such as passing over women employees for promotion and “low wages, inadequate hours, and lack of healthcare” (https://www.commondreams.org/newswire/2013/05/23-10). It certainly isn’t because of lack of revenue! Or because the whole shebang is run by mean ol’ men! Maybe We the People of Wal-Mart Nation need a constitution also! (http://www.socialnetworkconstitution.com/index.html)