Companies must reveal more about income gap
Americans will be hearing a lot more about the wealth gap, income inequality and related topics as the presidential election campaign ramps up. These issues tend to crop up every election cycle.
What’s different this time around is a relatively new corporate-disclosure rule, which can add context to the debate — and perhaps even give an indication of whether you would want to work for certain employers.
Publicly owned companies now must reveal how wide a gap exists between the compensation earned by average workers compared to their chief executive officers, in what is usually called the “CEO pay ratio.”
What’s changing
The rule, part of the Dodd-Frank Act reforms, has been phasing in over the past couple of years. For the first time, nearly all corporations now provide the ratio of what their CEOs earn each year compared with the pay for their median or midpoint employee.
Companies can provide more information, such as identifying the type of job performed by their median employee and where that person works, though without identifying him or her by name.
Corporations for years have been required to provide highly detailed compensation for their five or so topearning executives. As a result of these disclosures, CEOs often are viewed as prime representatives of America’s rich class, though you could also throw professional athletes, Hollywood stars and other celebrities into that mix, as well as people who have benefited from large inheritances.
CEO pay can be highly complex, as larger corporations routinely provide not just salaries but also stock grants, option awards, bonuses, souped-up retirement benefits and other forms of compensation. At any rate, all that isn’t new. What is different now are the disclosures providing insight on what rank-and-file employees make.
Large pay gaps
These pay ratios in many cases are quite large — often surpassing 100-to-1 and sometimes topping 1,000-to-1, such as 1,076-to-1 at Walmart, where the company’s more than 2.3 million global workers earned $21,952 on average last year.
At McDonald’s, CEO Stephen Easterbrook’s compensation was 2,124 times that of the company’s medianpaid employee — a part-time worker living in Hungary who earned $7,473. Pay ratios tend to be higher at companies with lower-skilled, part-time and seasonal workers, especially if they also happen to live in developing nations.
Shoe-maker Nike said its median employee earned $24,955 from working at an unidentified store in the U.S. CEO Mark Parker earned 379 times that amount.
vation came when they had to move into the house earlier than expected in April.
“Our house sold really quickly, and the original countertops never came in,” she said.
They doubled the size of the center island, so hunting for a new slab proved difficult. No countertops meant no sink or stove. They finally found a beautiful marbled slab of white quartz that fit the space perfectly.
The white shaker cabinets with black handles created a clean, cohesive look together with the elongated subway tile backsplash. Jenn accented the space above the stove with a herringbone pattern, complete with a pot filler.
What once was a formal living room was transformed into a comfortable, stylish sitting room that greets guests when they walk through the front door. It is pleasing to the eye, and family friendly.
A butler pantry leads to the kitchen and houses a wine refrigerator, microwave and coffee station.
Their two sons, ages 2 and 4, have their own wing, with a playroom separating the two bedrooms. The monochromatic design of the playroom fits well with the rest of the house, and it is the boys’ favorite space.
The master bedroom is situated on the opposite side, creating the soughtafter split floor plan.
Home renovations still in progress
The renovations are not complete, as they have plans for updates to the master bathroom and backyard.
Jenn’s advice to her pre-renovation self: to factor an interior designer into the budget to help with the myriad of choices that overwhelmed her while trying to parent two young boys.
Now that they’re settled, however, Rob and Jenn believe they’re in their forever home.
“We spend our evenings with the neighbors in the park,” Jenn said. “I know any of the other moms would help me out in a heartbeat if anything ever came up.”
They also love being within biking distance to shops and restaurants. Rob, who is in the Reserves and an F-16 instructor at Luke Air Force Base, has been flying the F-16 for 15 years. He also flies for a major shipping company, so he has to be away a lot.
“I do feel like our neighborhood is like a squadron . ... It has been a gamechanger having that community around the boys and I, so we don’t feel so isolated when he is gone,” Jenn said.
“The location and the kid-friendly neighborhood is what appealed to me most before buying the house,” Rob said.
As for their favorite part of the house, Rob and Jenn both love the kitchen and the open floor plan.
“I love the playroom between the two boys’ rooms and the four-car garage,” Jenn said.
The couple can see their boys growing up and riding bikes around the neighborhood. It is a picture, perhaps, of an America of old; for Jenn and Rob, it was the perfect reason to purchase their home.