Carpe Diem

The average US CEO last year made only $178,400 (about the same as a dentist), and got a raise of less than 1%

Occupation Average Annual Wage, 2013
Anesthesiologists $235,070
Surgeons $233,150
Oral Surgeons $218,960
Obstetricians $212,570
Orthodontist $196,270
Internists $188,440
Family Practitioners $183,940
Psychiatrist $182,660
Chief Executives $178,400
Dentist $168,870
Nurse Anesthetist $156,690
Petroleum Engineer $149,180
Average for All Workers
$46,440

Every time CEO salaries of S&P500 companies are reported, there’s a lot of hand-wringing, criticism of “excessive CEO compensation,” and the inevitable comparisons of rising CEO salaries to stagnant pay for average workers, and how that contributes to rising income inequality, etc. For example, here’s how USAToday reported 2013 CEO pay in an article last week titled “Millions by millions, CEO pay goes up“:

When it comes to executive pay, 2013 could be one for the record books, with 15 CEOs and other key members of publicly held companies gaining membership into the $100 million-plus compensation club, likely the most since before the 2008 financial crisis.

USA TODAY’s analysis of Standard & Poor’s 500 companies headed by the same CEO the past two fiscal years shows 2013 median pay — including salary, bonus, incentive awards, perks and gains from vested shares and exercised stock options — jumped 13% to $10.5 million, a level buoyed by soaring stock prices that’s likely to rise as more companies meet annual Securities and Exchange Commission filing deadlines.

Coming in a year in which corporate earnings gains continue to come mostly from job cuts and streamlining instead of organic growth, as well as nearly a decade of stagnant wage growth for rank-and-file workers, continued gains in CEO pay underscore the disconnect between boardrooms and Main Street. Among the nation’s 104.8 million full-time workers, average median annual wages were $40,872 last year, up just 1.4% over 2012.

“The extremes are getting bigger and run smack dab into the debate of income inequality,” says veteran compensation consultant Alan Johnson.

MP: 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.”

For the larger sample of CEOs reported by the BLS, their average pay increased by only 0.88% in 2013, from $176,840 in 2012. In contrast, the BLS reports that the average pay of all workers increased by 1.42% last year to $46,440 from $45,790 in 2012. That’s right, the average worker last year saw an increase in their pay that was more than 60% greater than the increase in pay for the average CEO.

As the Wall Street Journal pointed out last week, the average U.S. orthodontist earns $196,270, or 10% more than the average CEO ($178,400). But you would certainly never think that from all of the media hype about “overpaid CEOs” and “excessive CEO compensation,” etc. We never hear about “overpaid orthodontists” or “excessive orthodontist compensation,” or the fact that orthodontist pay increased by 5.34% in 2013, or 6 times the 0.88% increase in the average CEO’s pay last year. You would also never think that the average dentist makes $168,870, almost as much as the average CEO. “Excessive dentist compensation”?

Other medical professionals like anesthesiologists ($235,000), surgeons ($233,000), obstetricians ($212,000), internists ($188,000), family practitioners $184,000), and psychiatrists ($183,000) all earned more on average last year than the average CEO. Even the average nurse anesthetist ($158,000) and petroleum engineer ($149,000) earned salaries last year that weren’t too far below the average CEO (see table above).

Bottom Line: Discussions about “excessive CEO pay” are distorted by looking at only an outlier group of the 200 CEOs of America’s largest companies, out of 248,760 chief executives nationwide. Of course, many young, risk-taking CEOs are running early stage startups and tech companies, and probably make even less than the average CEO as reported by the BLS, as Scott Drum points out to me in an email. Further, he comments that “They’re usually not in it for the salary. They’re in it for the payoff if things go well. If we reduce the size of the Big Payoff, don’t we affect the number of people trying to get there?” The fact that there are almost 250,000 ambitious CEOs making less than $200,000 today on average who are trying to someday be listed by USAToday as one of the top 200 highest-paid CEOs in the US is a sign of a dynamic, wealth-generating economy. We should applaud the richest 200 CEOs as a group of the most successful American business professionals, and not vilify them. And we should keep in mind that they are an outlier, elite group, and not representative of the average CEO in America, who earns about as much as the average dentist.

77 thoughts on “The average US CEO last year made only $178,400 (about the same as a dentist), and got a raise of less than 1%

  1. Discussions about “excessive CEO pay” are distorted by looking at only an outlier group of the 200 CEOs of America’s largest companies, out of 248,760 chief executives nationwide

    That certainly is true, but also because many CEOs have incentive-laden packages. Their base salary is fairly small, but they also get shares and bonuses depending upon company performance. For example, when talking about the CEO of Wal-Mart, people love to look at his total compensation package, which includes vacation time, stocks (which he cannot cash until he leaves the company), performance incentives he may or may not have earned, etc.

    • And they didn’t have to threaten a single person to get the stockholders of those companies to pay them.

      Who would decide if another person’s compensation was earned, other than the ones voluntarily paying it?

      • What is it, exactly, that Lloyd Blankfein or Jamie Dimon or Steve Schwarzman do that can’t be done by others? These guys aren’t the Isaac Newtons or Johannes Keplers of the early 21st century financial world, who even knows how many decisions they make personally and how effective those decisions have been. In the case of the first two, without government help their banks could well have passed from existence. When banks were private, guys like J.P. Morgan were the bank and stood to gain or lose. Today, as public companies with interlocking directorates and irresponsible compensation committees these jokers can’t lose. Mutual funds, the biggest stockholders in these banks, don’t care how much the executives skim as long as the stock price keeps going up, they’re not in it for the dividends. Blankfein can’t possibly know everything that’s going on in the financial trenches, good or bad, but he gets rewarded like he invented banking rather than grabbed a spot behind a teak and mahogany desk on Wall Street.

        • Chuck

          What is it, exactly, that Lloyd Blankfein or Jamie Dimon or Steve Schwarzman do that can’t be done by others? These guys aren’t the Isaac Newtons or Johannes Keplers of the early 21st century financial world, who even knows how many decisions they make personally and how effective those decisions have been.

          Exactly. We have no idea what they do, so we have no way of what their pay package should be.

          Blankfein can’t possibly know everything that’s going on in the financial trenches, good or bad, but he gets rewarded like he invented banking rather than grabbed a spot behind a teak and mahogany desk on Wall Street.

          He “grabbed” a spot? Are you sure” that’s what happened?

        • One reason CEOs of large companies get paid as highly as they do is to motivate other employees. High pay obviously helps recruit top talent but the promise of high pay in the future has a similar effect.

          If the upper management of large companies are paid millions of dollars it can incentivize tens of thousands of employees. The cost per employee is low, it’s not hard to see how this could represent good value for shareholders.

  2. Perry ignores the fact the economic discussion focuses on the 0.1 or 0.01%, whether or not they’re CEO’s. And this small group of people takes an ENORMOUS amount of national income. Also, their income growth has outpaced the rate of productivity growth for over 30 years.

    So let’s not weep too much for the 1%. In spite of Perry’s handwringing, they’re doing OK. The people they pay, however, are not.

    • Oh Lordy! Oh Lordy!

      I want to respond but I am quaking in me boots that you’ll make me look like a dupe again! Oh, and Mr. Koch gave me such a thrashing at the club last night for being made to look like a fool by your obviously superior brain and your comprehension of the situation. Oh, I am so outmached! Dare I proceed?

        • Oh, I’m quaking. He called me irrelevant, so I must be! After all, he is always right, even when he contradicts himself!

          Oh, please Master Robert, have mercy!

        • Oh I know I am outmatched. His brain is just too far superior!

          I am just a poor loser who must bow to his superiority.

        • And if that doesn’t work, he’ll finish you off with his patented “Rush (PBUH)” rib kick.

          He’s much too witty for the likes of us!

          • Although I don’t know what he has against Rush. They’re a great band

            Indeed. I’ve wondered that myself. They’re accused of having “talking points”, but they sound to me like “singing points”. I’m so confused.

    • robert-

      your claims here are completely false and self contradictory.

      you claim that compensation should be tied to productivity.

      i agree.

      but you then ignore this entirely in the rest of your argument as you try to plot hourly wages for production workers against the productivity of the whole us economy and then do the same for CEO”s and founders.

      productivity gains are NOT evenly spread.

      in the last 30 years, the productivity of a ticket seller at the movies has barely budged.

      the productivity of a software designer has SOARED.

      the productivity gains created by a guy like larry page or sergey brin at google are barely calculable they are so high.

      your whole argument is self defeating.

      you claim that pay should mirror productivity gains, but then miss the fact that IT DOES.

      those gains are just not evenly spread.

      the productivity of a guy who founds a company that, in a decade, comes out of obscurity to become one of the most profitable companies in the world with 60bn in annual revenue and over $12bn in profits is, to say the least, incredibly high.

      so, therefore, is his compensation, most of it in the equity of the company he created.

      if you spent half as much time looking for somehting similarly useful to create as you do whining about false facts on productivity and compensation, you might get yourself a slice of that pie too.

      you should look into it.

        • but, but, jon?

          i thought the “right wing” (of which i realize you are no more a part than i am) never had data?

          that sure looked like data to me. OMG, i am so confused.

          could it be that robert is wrong?

          wow. who would have seen that coming?

          • Oh it’s not real data. The Koch brothers paid me to fabricate this story. They pay quite well. I built the website and wrote the fake report under a penname and everything.

            Us right wingers never have any data. All he have is blather and lies.

          • ” I built the website and wrote the fake report under a penname and everything. ‘

            wow.

            that sounds like a lot of productivity.

            you probably get paid too much.

          • I probably do. I have them pay me all in gold coins so my pants will jingle as I walk past poor people on the street.

          • oooh!

            do they let you swim around in the huge scrooge mcduck vault they run for the Illuminati?

        • Compensation is keeping track with productivity. Not since 2000.

          “Before 2000, the difference between the growth rates of the CPI and the IPD—that is, the difference in inflation rates—explained most of the gap in each period. For 2000 to 2009, an unprecedented decline in labor share accounted for most of the gap.”

          See The compensation-productivity gap:
          a visual essay
          from the BLS.

          Try to keep up with the latest data. :-)

          • If you read the paper I linked to, you’ll see that, yes, I am keeping up with the latest data.

            Also, do you know why it changed in 2000? because the CPI changed.

          • jon-

            “marmico math” is a special case.

            i think one needs to be peak trader to understand it.

            those series are not directly comparable either.

            to compare overall productivity to just hourly compensation is to miss that fact that much of the most productive workforce is salaried, not paid hourly, and that data on the hours those salaried folks work simply does not exist.

            it’s either a case of willful misrepresentation or a case of simply not understanding what the data actually means.

            also:

            such data ignore notions of WHY productivity changed.

            if a worker becomes more productive because his employer buys him a backhoe instead of a shovel, much of the productivity gains in income should (rightly) go to the provider of the capital than made it happen. absent such ROIC, there is little incentive to make such an investment.

            thus, we must also separate changes in the actual productivity of the worker from the gross change in productivity if we want to get a true measure of how compensation tracks productivity.

          • See The compensation-productivity gap:
            a visual essay from the BLS.

            Yes. exactly what one would expect. what’s the problem?

    • So, Robert, you think all the rich people should be beaten, raped, and then have all their money taken away?

      Typical left-wing echo chamber!

      Everybody see that? the Left wants rich people beaten, raped, and robbed!

    • also:

      the “1%” is far from monolithic.

      the % of us wealth owned by the bottom 90% of the top 1% has not moved in 60 years.

      the only real change (and the one that has skewed the top 1% figure) is actually the top 10% of the top 1%, and even then, mostly the top 1% of the top 1%.

      http://www.cnbc.com/id/101540240

      this is the nature of innovation and a modern economy.

      if you hit a new web service or application that becomes extremely popular, you can very rapidly reach a market of billions of people and can grow very, very quickly.

      the number of people who use google is staggering.

      the number of people who invent google is very low.

      thus, wealth gets concentrated.

      this is fair, mirrors productivity, and coerces no one.

      employees at such a company are very well paid.

      to demand similar pay for those who have not created the same kind of value, not seen the same productivity gains, and not made so many other people better off (else why would they use it?) is just greed.

      they build it, you demand the money?

      they have huge productivity gains and you do not, but wish to be paid as if you did?

      wages do track productivity. they track it very closely.

      it’s just the apples and oranges charts that ignore the fact that gains are not evenly spread that lead you to these consistently wrong conclusions.

      for a “scientist” you sure do not know how to handle data.

      • Golly. If wishes were horses beggars would ride.

        You ASSUME CEO pay mirrors productivity.

        Prove it.

        You complain about the fact I’m a scientist yet you make all KINDS of unwarranted and unsubstantiated claims

        Go ahead. Prove the financial sector earned their income as the economy collapsed.

        Prove that the pay of Fortune 500 CEO’s increased at the same level productivity did.

        We’ll wait.

        • You ASSUME CEO pay mirrors productivity.

          Prove it.

          You mean aside from the evidence already posted by me?

          And why is it that when you assume, it’s fact, but when we present evidence, it’s as assumption? I mean, do you know what those words mean?

          Ah, but who am I to ask. I am just a boob.

        • what a pile of disingenuous crap.

          “Also, their income growth has outpaced the rate of productivity growth for over 30 years.”

          does this look familiar?

          how about you prove your claims first?

          you constantly make claims, refuse to prove them, then demand that others prove any argument they make to the contrary.

          so come on you intolerable and dishonest hypocrite.

          put up or shut up.

          we’ll wait.

          also:

          stop and think for a moment:

          ceo/founder pay is mostly in equity.

          equity prices (in the long run) reflect value created.

          thus, the only way for a ceo to get paid so much is to create value for shareholders and they way to do that is to create a valuable and profitable business.

          thus, it is impossible for them (in the long run) to get paid so much without being that productive.

          companies are not stupid. they do not, for the most part, overpay CEO’s.

          the board, in possession of a great deal of company specific data and in accordance with the market price for talent hires the ceo and determines salary. paying a CEO more comes out of their pockets.

          they have a great deal of incentive to get the best performance for pay they can. it maximizes their own (and shareholder) wealth.

          why would they overpay?

          but a guy who is 2% better than another guy at a huge company like JMP might create additional hundreds of millions in value. he might be the guy who pushes apple into mp3 players instead of focusing on a video game console.

          those decisions are critical.

          you seem to thing that the same guys who are so good at getting rich are also stupid.

          it blows my mind that you think you are even remotely qualified to discuss these issues.

          you literally appear to know nothing at all except how to frame a very dishonest debate.

          note:

          i do not complain about you being a scientist.

          i do not believe that you are a real scientist.

          real scientists know how to handle data and how to frame valid logical propositions.

          you do not.

          ” Prove the financial sector earned their income as the economy collapsed.”

          this doesn’t even make sense.

          seriously, you are like a parody.

          you have this set of outlandish prejudices based on zero experience or knowledge, make up facts, provide no data, and then bellow about how “the right” possesses all the flaw you exhibit every time you open your mouth.

          you’re a joke dude.

          • you have this set of outlandish prejudices based on zero experience or knowledge, make up facts, provide no data, and then bellow about how “the right” possesses all the flaw you exhibit every time you open your mouth.

            It’s called “projection.” In order to compensate for personal failures, some people will “project” their failures upon others and then attack them in an effort to correct their failures.

            But you also got to keep in mind the guy is not above lying. Hell, just look at the health care conversation from yesterday.

        • You ASSUME CEO pay mirrors productivity.

          Prove it.

          You are the one who wants to use the coercive powers of the police state to redistribute wealth according to what you claim to be true. Since you are the one clammering to steal from one group and give to another, the burden of proof is on you.

          In a free society, free men don’t have to justify their actions or lifestyle to anyone. However, for the government to intrude into people’s lives, the government needs a justification. Otherwise you simply believe in the rule of men completely independent of laws and rights. In other words, puBear, you are endorsing monarchy and aristocracy.

    • this small group of people takes an ENORMOUS amount of national income

      This small group of people “takes” nothing. They create, and thus earn, an enormous amount of wealth.

    • Robert

      What is this ‘ national income’ business?

      Income is earned by individuals and it is their property.

      When you use aggregates to simplify your thinking you find yourself led astray.

      The ‘nation’ does not do any work, adds no value, and accrues no income. All of these are accomplished by individuals.

      In the absence of ‘national income’ the idea of a ‘fair share’ is content free.

  3. Coming in a year in which corporate earnings gains continue to come mostly from job cuts and streamlining instead of organic growth,

    Woah, back the train up, USA Today. This statement is just false. Yes, companies are streamlining (but that is a good thing), but there is organic growth going on. By any measure you want, Retail Sales, Industrial Production, New Orders, there are record sales opportunities for companies. Also, the economy has been adding jobs, not losing them, so companies are not “cutting jobs” to promote profits.

  4. This post is true but misleading. Most CEO’s of private companies are also owners who build most of their wealth through increasing their unrealized gains in equity. The average worker relies much more on salary to build wealth.

        • greg-

          and, as well all know, equity is risk-less, right? when companies fail, equity goes to zero. employees do not lose the salary they were paid, but founders get creamed.

          half of new companies fail in the first 4 years. 70% in the first 10. the losses ceo’s incur (especially if they used their own money for start up costs) are similarly excluded.

          further, as these are based off of tax returns, and equity that is actually ever sold DOES get included.

          as a median figure, i bet this overstates ceo pay.

          it’s just the few big winners that drive up the average and the fact that a founder has zero cost on stock means realized gains are reported as tax, but losses are not (as they have no cost basis).

          i think you are making a largely inaccurate argument here.

          statistically speaking, starting a company is a far better way to lose your ass than to get rich.

          • statistically speaking, starting a company is a far better way to lose your ass than to get rich.

            This is why I do not think something like entrepreneurship can be taught. To run a business requires a very high tolerance for risk and incredible amounts of stress.

            The CEO of my company makes several times my salary (I’d guess about 10-12 times my salary). I do not begrudge him for that because I know 1) he works 20 hour days 7 days a week and 2) this company is everything. If we were to go under, he would lose everything.

          • actually, i take that back.

            i had assumed these were tax returns, but they are not. there are from the BLS OES series.

            this looks to be a GAAP based series in which case, equity and options gains will be baked in already.

            does anyone know for sure?

          • morganovich

            I am keenly aware that equity is not risk-less so could we dispense with that straw man please? And by the way, employees whose retirements depend on stocks face equity risk as well.

            As it happens I made my living as the CEO of a private company that I owned. I am happily retired now living comfortably off the sale of that business. I am well aware that it doesn’t work out like that for everyone.

            Anyone who doesn’t want to start a company is free not to. In general CEO’s do a lot better than employees. That is why many employees aspire to be CEO’s but few CEO’s aspire to be employees.

          • ” And by the way, employees whose retirements depend on stocks face equity risk as well.”

            well, now you seem to be trying to have it both ways.

            so, employees benefit from stocks? sure. just like a CEO, but with far less risk as they are far less concentrated. they also tend to get it without putting anyhting up. founders tend to be the ones who put in the seed capital.

            ” In general CEO’s do a lot better than employees”

            this is very often not the case, and i’m not sure it’s even the case in general.

            the CEO/founder of a successful company does better than the employees, but then again, they only have jobs because he/she founded a company.

            they take salaries and do not kick in equity.

            founders often put up loads of personal equity and then lose it all if they fail.

            the employees may make money for 2 years, but the founder may lose a ton.

            i deal in starts ups for a living from the angel level all the way up to public companies and i have started 6, 5 quite successfully, so i’m not making this stuff up here.

            i happen to know a great deal about this.

            i have looked at literally 1000′s of companies and seen how many either wiped out their founders or made them far less than they could have made as an amployee.

            risk and reward are correlated.

            employee is relatively low risk. you get paid and take it home.

            putting up money to found a company is MUCH riskier, especially if you are using it (at the beginning) to pay employees (as is very common).

            ” That is why many employees aspire to be CEO’s but few CEO’s aspire to be employees.”

            many employees aspire to be CEO because they do not know how hard it is. they would like to magically be ceo, but if they really wanted to be one, they’d start a company. the fact that most do not implies that they do not really feel as strongly about it as they claim.

          • greg-

            also:

            that was not a straw man.

            i did not attribute an argument to you or misrepresent anyhting you said.

            it was sarcasm used as a way to point out something you left out of your calculation.

            not the same thing at all.

            if you are going to accuse others of using straw men, you should first learn what the term means.

          • morganovich

            –”so, employees benefit from stocks? sure. just like a CEO, but with far less risk as they are far less concentrated. they also tend to get it without putting anyhting up.”

            Really? Where are these companies giving away free stock? Maybe there really is a free lunch? I always thought employees had to “put up” their money or their labor in exchange for any stock they received from their employers.

            And I’m sure it is true that, as you say, some employees aspire to be CEO’s because they don’t know how hard it is. But that still leaves unexplained why more CEO’s don’t aspire to be employees. Surely they are aware of what a great deal it is to be an employee.

          • ” I always thought employees had to “put up” their money or their labor in exchange for any stock they received from their employers.”

            generally, employees are granted options and stock. unlike a founder, they do not pay for it or put up initial capital.

            thus, your argument would seem to apply to ceos even more so.

            i have seen a lot of ceo’s wind up wishing they were employees (and note, a ceo IS still an employee. he/she works for the board and the shareholders).

            when you start up is falling apart and you have burned your nest egg, lots of guys just want to go get a stable job, get paid at low risk, and get repaid.

            i have also seen a great many ceo’s step aside and invite in someone else to take on that role because they realize they are not good at it. the traits that make one a great entrepreneur and the things that make it fun for many are not the same and often even run in opposition to those that make someone a good manager. i’ve seen a number of former ceo’s step down to cto or chief medical officer or some such.

            i think you are assuming most of your conclusions here.

    • Also, be weary of the “gains in equity” argument. That is true, but only helps them if they sell the business. Until then, they are reliant on salary

      • You are right about that Jon but I have yet to see a CEO who didn’t also receive a far better benefits package than his employees.

          • and several of my old bosses.

            at small firms, everyone tends to get the same benefits.

            also:

            those benefits are explicitly baked into the BLS numbers above, so there is no need to try to adjust for them.

            it’s already there.

        • Why would you assume that your boss would tell you if he was getting a better benefits package than you? (Not that there’s anything wrong with that)

          • Although, you are right. It is possible he would lie, but I doubt it. He is a minister, after all.

          • In most private companies it is not public knowledge and there is no reason why an owner would want it to be. No lying needed. Simply no obligation to disclose.

          • Right but due to certain…conditions…the CEO’s compensation, all of it, is made public to us employees.

          • greg-

            given that benefits are already baked into the numbers mark cited, why is this possible variance (and i am sure it is true in many cases) an issue?

            it’s already in the numbers.

            we do not need to adjust for it.

    • The average worker relies much more on salary to build wealth.

      I see this assertion thrown around a lot, and with just as many facts as you put down to back it up. The reality the wealthy rely just as much on income as the average worker.

      • it’s also not true that employees do not rely on equity.

        my father was never a c level officer. he was a salesman and wound up as head of sales at 2 companies.

        but most of his lifetime wealth came from equity, not compensation.

        i know a great many “employees” who made their money in equity and far more employees now get equity participation than 20 or 30 years ago.

        • morganovich

          Now you are just being disingenuous. Of course “far more employees now get equity participation than 20 or 30 years ago.” They get it, for the most part, in place of the defined benefit pensions that used to be commonplace. There are some very good reasons for this change but it represents a decrease, not an increase, in the retirement benefit for most workers.

          • ” They get it, for the most part, in place of the defined benefit pensions that used to be commonplace. There are some very good reasons for this change but it represents a decrease, not an increase, in the retirement benefit for most workers.”

            if you want disingenuous, look to your own comment. all i did was state a clear fact that you agree is true. you may need to add “disingenuous” to “straw man” on the list of words you need to learn the meanings of.

            defined benefit pensions were more common in the past, sure, but most workers did not get them.

            they were still only for those who worked at big companies. only 28% of private sector workers were in defined benefit plans in 1979. while that number has dropped to maybe 4% today, 51 million americans have 401k’s, and a great many more have equity and options participation.

            and pensions were FAR from riskless.

            look at how many companies fail. to be exposed to their solvency and actuarial accuracy and disciplined contributions for not only your whole tenure there (which had to be long to get a pension) but for 20 years of retirement was a far greater risk that getting equity. look how many companies failed to reserve enough and used aggressive assumptions and were unable to pay what they promised.

            a 401k is better in nearly every respect.

            i suspect your claim about it being a decrease in benefits for most workers is pure fiction.

            more workers get equity today than ever got pensions and when equity hits, it really hits as opposed to pensions that can be quite risky (solvency, proper reserves) and do not.

            do you have any data to back up your claim?

            i find it highly implausible.

  5. What the chart shows, at least in part, is the real problem with the US medical/health industry, which isn’t now and never has been insurance. Government policies have limited the number of the most valuable medical personnel, supply can’t catch up to demand. If truck drivers were earning $75/hr., trucking companies would be training drivers like crazy in order to bring that compensation level down. The medical field isn’t any different. Pharmacists, for instance, require extensive education and licensing, and compensation, to walk over to a shelf, select a bottle, and then hand it to the customer in exchange for cash or an insurance payment. By the way, why should insurance pay for an ongoing medical regimen that might last for years? That would be like homeowner’s coverage paying for washing the windows of your house.

    • If you bought your homeowners policy through your employer and were, similarly, under the illusion that it didn’t cost YOU anything, I have no doubt that window washing would be covered.

    • What the chart shows, at least in part, is the real problem with the US medical/health industry, which isn’t now and never has been insurance.

      Yes.

      Also, immigration of foreign doctors and nurses is quite restricted. In Canada, many doctors make only half of what an American M.D. makes for the same work. Many foreign doctors (even from first-world countries) would like to come here, but that is restricted by AMA lobbying.

  6. A better metric might be the comp of S&P 500 firms or the 1000 or perhaps the Dow Jones Total US stock market index or the DJ 2500 us stock market index: http://www.djindexes.com/totalstockmarket/
    Or perhaps all companies that have had to file a proxy statement (which discloses CEO information) For companies with a large stock holder for example Bill Gates when he was CEO of MS his salary was I Believe $1 since he would rather have had capital gains. So we need to exclude private companies because games can be played between comp and dividends for example. (20% vs 39% for example taxes). Note that the proxyies give total comp including stock options. Comparing the salary of the CEO of a local book store to that of Exxon is really an apples to cucumbers comparison.

    • Bill Gates when he was CEO of MS his salary was I Believe $1 since he would rather have had capital gains.

      A number of CEOs do that, especially since the tax incentives.

  7. It is a shame that America is rapidly destroying the very values that one made it great.

    In San Francisco, some idiots are protesting a tech entrepreneur at his house, for ‘creating too much wealth in the city’…

    http://pjmedia.com/instapundit/186440/

    “Lefty politics is based on envy, resentment, and a deserved sense of inferiority”

    Also, while a few inept CEOs get paid a lot for nothing, the very good CEOs generate value that can be 50, 100, or 500 times their compensation. This is never true for lower level employees, who often get promoted once they generate 50% more than their compensation….

    • 50% more than compensation seems low e an if it were total compensation.

      Plus it is difficult to calculate. As an engineer. I design things other folks manufacture. Do I get credit for every item produced? How do you divide my contribution with the factory floor persons contribution? What should be attributed to HR, etc..

    • What’s the “average dentist education loan debt” got to do with how much a person should pay for a tooth extraction?

  8. Interesting post, though I do think CEO pay probably skews higher than it should. But the solution is for new competition to come along and put the companies overpaying their CEOs out of business, not to get the dumb govt and nincompoop politicos involved, and that competition is what will happen soon.

    But the reason I commented is, what’s “average median annual wages?” Is that like jumbo shrimp? ;)

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