Finance chief executives get all the flak for raking in outsize paydays every year, but the biggest gap between high-wage CEOs and their lower-rung employees is a trademark of a very different industry: retail.
When taking the average pay for everyday workers compared to the chief executive, retail executives end up looking worse than their big bank brethren, according to an analysis by Bloomberg. The comparison, known as the pay-ratio rule, was adopted by the U.S. Securities and Exchange Commission last month. It’s intended to highlight the wage gap between top management and rank-and-file workers, requiring companies to report their CEO’s pay as a ratio to their workers’ median income.
While initially directed at investment banks and hedge funds as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rule may end up focusing the most scrutiny on industries where most workers earn near the minimum wage.
For instance, TJX CEO Carol Meyrowitz and CVS Health CEO Larry Merlo each raked in more than $28 million last year, surpassing the annual income of Goldman Sachs CEO Lloyd Blankfein (about $24 million) and Morgan Stanley’s CEO James Gorman ($22.5 million). The pay ratios will look even more stark given the gap between everyday store workers’ incomes and investment bankers’ paychecks.
Read more at Bloomberg.com.