Pay ratio gap widens between chief executives, rank-and-file employees (Winston-Salem Journal)

4/24/2018 Salary statistics

This article was authored by RICHARD CRAVER - to access the complete article on the Winston-Salem Journal click here

(Extract) The heat is being turned up on the already hot-button issue of corporate executive compensation.

Since 1994, the annual salary, bonus and incentives, stock awards and other compensation of top-five executives have been available publicly by requirement of federal regulators.

This year, a Dodd-Frank Act rule requires corporations — for the first time — to put a number and a ratio to the compensation gap between chief executives and their median employee salary.

Median is defined as the middle value in a list of numbers.

For some corporations, particularly those that have a significant number, if not the bulk, of their employees working offshore, the gap between the chief executive to median employee pay ratio can seem miles apart.

For example, the total compensation for Hanesbrands Inc.’s chief executive, Gerald Evans Jr., was $9.58 million in 2017. Although Evans was paid $1.1 million in salary, the bulk of his compensation was $6.25 million in stock awards. Those awards are accounted for and payable over multiple years, but they have to be declared annually.

By comparison, Hanesbrands reported in its 2018 proxy filing to shareholders that the median annual employee compensation was $5,237 for its nearly 67,200 employees.

That means Evans’ pay ratio equals out to $1,830 in total compensation for every $1 earned by the median employee, as well as Evans receiving $210 in salary for every $1 earned.

About 88 percent of Hanesbrands’ employees work outside the United States, including 55,000 employees employed in its supply-chain facilities in Central America, the Caribbean Basin and Asia.

Hanesbrands explained in the CEO pay-ratio section of the filing that “our various compensation programs include the payment of market-based wages and the provision of competitive employee benefits. The programs vary from region to region.

“We estimated that for 2017, our global median employee was an equipment operator located in a supply chain facility in Honduras,” it said..... (read the complete article)


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Original article on The Winston-Salem Journal