Examining CEO Wages

April 10, 2014
While headlines proclaim multi-million dollar salaries for CEOs, a deeper look at the data on CEO wages reveals a different picture.

Do you remember last week’s USA Today headline article about CEO wages?  CEOs making $10 million a year?  Others were reported at earning over $100 million a year.  That’s right; I said “earning” because they are being paid to do a job.  Their pay is set by the Board of Directors, and the Board is established by stockholder/investors.  They decide whether the pay is reasonable or not.  A salary level is not a function of voter referendum or public opinion.  The people who have a financial stake in the financial success of the firm determine whether the CEO’s pay is outrageous or unreasonable.  People who don’t like the pay level at those few companies should boycott those companies if they feel that strongly about it.

CEO reality is much different from the headline news.  The CEOs you and I know don’t make anything like the kind of money reported in the media. The following data comes from the Bureau of Labor Statistics1 as of May 2013.  

Surgeon - $233,150
Family Doctor and General Practitioner - $183,940
CEO - $178,400
Dentist - $168,870
Marketing Manager - $133,700
Lawyer - $131,990
Chemical Engineer - $104,340
State Governors - $133,348 (average, Pew Research)
Production Workers - $34,930

So why don’t we hear an uproar about doctors, dentists and engineers?  The anti-business vitriolic in this country is not healthy.  It would be much better to have people aspire to get the education, work hard, make sacrifices, and take risks in an attempt to reach these compensation levels.  

1 Metropolitan and nonmetropolitan areas, Annual Mean Wage.

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