$15 an hour? These retail and restaurant CEOs make $9,000 an hour
Restaurant and retail workers are pushing for a national minimum wage of $15 an hour, but some CEOs in the industry have landed pay packages worth $9,000 an hour or more.
The highest paid chiefs in these industries include Larry Merlo of CVS Health (CVS), who earned $13,914 an hour, Leslie Wexner of Victoria's Secret parent L Brands (LB) who brought in $13,062 an hour, Howard Schultz of Starbucks (SBUX), who made $9,659 an hour and Douglas McMillon of Wal-Mart (WMT) who received $9,323 an hour. Four retail and restaurant CEOs earned more than $9,000 an hour last fiscal year, according to a USA TODAY analysis of data from S&P Global Market Intelligence. The analysis includes the 76 restaurant and retail companies in the Standard & Poor's 1500 that have disclosed their fiscal 2015 executive pay and is based on a 40-hour work week.
These CEOs' pay packages come amid moves by states such as New York and California to boost the minimum wage to $15 a hour. The minimum wage increase will affect a large pool of workers that include retail and restaurant workers such as store clerks, cooks and waiters.
The 76 restaurant and retail company CEOs who have 2015 pay reported so far earned a median of $2,703 an hour, about $5.6 million annually. Stephen Easterbrook, CEO of McDonald's (MCD), the fast-food giant that is often associated with minimum wage, earned $3,803 an hour last fiscal year, or $7.9 million total, according to the company's proxy filed Friday. That ranks him No. 25 among the companies in this analysis.
The minimum wage hikes come as greater attention is being paid to how large the difference is between what the CEO and the rest of the company earns. It would take an employee earning $15 an hour nearly 23 days to earn as much as the median CEOs in these industries do in one hour.
"The disparity between CEO pay and rank-and-file workers' pay continues to be at extreme levels in our economy," says Brandon Rees, deputy director of the office of investment at labor union AFL-CIO. "It’s hurting productivity and reducing employee morale, and it’s exasperating economic inequity in our society as a whole."
The average CEO in the Standard & Poor's 500 earned 204 times more than the median employee at the same companies did in 2014, according to an analysis by job information service Glassdoor.com. The Security and Exchange will begin requiring companies to disclose this gap between CEO and worker pay starting next year.
SEC approves 'pay ratio' disclosure for CEOs
CVS' Merlo is the highest-paid CEO among the retailers and restaurants, earning $28.9 million, which works out to $13,915 an hour. His pay in fiscal 2015 fell 11%, but it would still take a worker making $15 an hour more than 115 days to earn that much. His company's stock rose 1.5% last year.
"Mr. Merlo’s compensation in 2015 reflected the company’s significant level of achievement, as well as his role in positioning the company for future growth," says CVS spokesman Michael DeAngelis. CVS' net income increased 13% to $5.2 billion in 2015.
If a firm has a strong financial performance, some investors could consider the high CEO pay worth it, says Scott Dobroski, a spokesman at Glassdoor, a job hunting and information site.
"It may raise some eyebrows at first glimpse, but if a company is doing exceptionally well, for instance, then it would not be that surprising," he says.
Some companies also say the way they're required to report CEO compensation adds in pay that doesn't actually vest over several years. Wal-Mart CEO Douglas McMillon earned $19.4 million last fiscal year. But that includes a multimillion-dollar stock grant that vests over three years and is only paid if performance targets are hit, a company spokesman said.
It's clear that being a CEO continues to not only be a great goal — but a lucrative one, too.
"It's nice work if you can get it," says AFL-CIO's Rees.
Follow Matt Krantz on Twitter @mattkrantz
