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Compensation

Amazon and McDonald's have largest wage gaps between CEOs and employees

By Isabella Aldrete
July 3, 2023 1:01 PM
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Dhiraj Singh/Bloomberg

As workers struggle to meet their day-to-day expenses and fight tooth and nail for a cost-of-living raise, CEOs continue to enjoy ballooning salaries that far outpace their employees' salary bumps. 

Income inequality has been exponentially on the rise since the second half of the 20th century. The U.S middle class, which once accounted for the majority of Americans, has been shrinking, while the salaries of top CEOs have increased by over 1,400% since the 1970s; in comparison, the average worker salary grew by just 18.1% in the same period, according to the Economic Policy Institute. 

Read More: The 10 best companies for career development

Extravagant CEO pay is a driver of rising income inequality. More than 80% of CEO's pay comes from stock-options, rather than job-related work, according to a study from the Economic Policy Institute. To gain further insight into the issue, Switch on Business conducted an analysis of America's 100 largest companies to unveil the severity of the problem and which industries are leading it. 

Amazon

Of the 100 companies surveyed, Amazon had the largest pay gap between CEO and employees. In 2021, Amazon's CEO, Andrew Jassy, had an annual salary of $212,701,169, while the average employee's pay was $32,855 per year. To further contextualize: it would take 6,474 years for the average Amazon employee to make Jassy's salary, while it would take him less than two hours to earn the average Amazon worker's.

In 2022, however, Amazon reported that Jassey's compensation dropped to $1,298,723, as reported under SEC rules.

McDonald's

McDonald's comes in second place. The average employee makes about $8,897 – below the federal poverty line – even though CEO Christopher Kempczinski earns $20,028,132 per year.

TJX Companies

TJX companies is best known as the owner of retail stores, T.J Maxx, Marshalls and HomeGoods. Ernie Herrman, TJX Companies' CEO, earned ​​$31,802,000 in 2022; the average employee, meanwhile, pocketed only $14,139 in a year.

Oracle

Oracle, the third largest software firm in the world, ranks fourth. While tech companies are known for their higher paying salaries, income disparity still pervades the industry. Safra Catz, Oracle's CEO, makes $138,192,032 per year, whereas company employees on average earn $75,043 annually. 

Coca-Cola

Finally, Coca-Cola takes the spot for the 5th highest income gap. The company's CEO James Quincey has an annual salary of $24,883,878. The average Coca-Cola employee makes just $13,894 per year.
Isabella Aldrete
Reporter
Compensation Workforce management
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