Here is a startling average CEO salary info graphic from the Australian Council of Superannuation Investors reported in a recent ABC post on CEO pay deals reaching their highest level in 17 years
That’s 11 blokes, and they are all blokes, paid $187 million between them.
An average CEO salary on the list might make the recipient declare $327,000 per week to the tax man.
As is usual on this blog, we’ll try and put these incomprehensible sums of money into context.
A delivery driver for Dominos starts at $15 per hour and might earn as little as $200 per week. That $187 million is roughly 6,309 person years worth of time for money at delivery driver rates working a 38 hour week.
Is the CEO worth the time of 631 people at the bottom end of the staffing pyramid?
A CEO would argue his case with vigor. Decisions, risk, and responsibility are all his and he’ll claim that this comes with an unfair level of stress. Indeed the jobs of all the workers depend on his calls that keep the company stable and trading profitably.
The delivery boy just has to get the pizza to the customer before it goes cold.
Disparity between those making decisions and those following them is nothing new. Throughout history leaders of all hues were in privileged positions that came through the support of their followers. People like being led and they are usually quite grateful for it.
If the leader takes people where they want to go, in the case of Domino’s Pizza Enterprises this was to a 7% profit increase despite lower than expected sales and a 9% loss in the share price, then they are happy and perhaps overlook what that direction might cost. More importantly they might not consider if the cost was worth it or even fair.
Then, of course, it’s a question of who is being led toward happiness. Not that many presumably given that the whole thing is legally designed to generate profit for shareholders who chomp on the profit dividends.
I suspect that average CEO salary will start to smell pretty soon. The majority of people are not led by ASX200 CEOs and they don’t understand why such remuneration levels exist. Indeed, I would be asking questions if I were a shareholder in any of these enterprises. Ironically I probably am without knowing it through the aforementioned superannuation investors.
At some point though, the majority will start to say enough is enough. There was an inkling of this with the Occupy Wall Street movement against wealth inequality, corruption and the influence of corporations on government. Not least the propping up of companies with public funds only for these companies to give bonuses to their executives.
And then that effort faded.
It will surely come again.
And anyway, what’s so special about pizza? What makes Mr Meij worth 33% more than the next highest earning CEO?
Maybe it’s the healthier, tastier menu.