CEOs at fifty-four major Ohio corporations made 396 times the average worker last year, an increase of 20% from 2020 and the highest difference on record, according to Policy Matters Ohio.
Policy Matters gathers data from reports filed by Ohio’s top 100 corporations to the Securities and Exchange Commission (SEC). The average pay of CEOs within 54 major companies was nearly $21.7 million last year, compared to the median pay of $48,283 for workers. Due to pay cuts and more low-paying jobs, the median worker’s pay was cut from $51,494 in 2020. Meanwhile, CEOs received a raise of nearly $6 million from 2020 to 2021.
Over a third of these corporations reported paying their CEOs 500 times as much as their average worker, and nine reported paying their CEOs 1000 times more— another all-time high reporting. For instance, in 2021, Starbucks paid their average part-time employee $12,935, while CEO Kevin Johnson made $20.4 million – 1,579 times as much.
In April 2022, Johnson was replaced by former CEO Howard Schultz, who has a net worth of nearly $4 billion. Since his return to CEO, Schultz has led union-busting efforts at Starbucks resulting in over 325 unfair labor practice charges from the National Labor Relations Board.
Amazon – Ohio’s fourth largest employer, reported the highest CEO-to-median employee ratio. Amazon’s new CEO Andrew Jassy made 6,474 times that of their average worker in 2021, with a whopping $212 million. Its average worker, however, made only $32,855.
Abercrombie and Fitch came second to Amazon with a ratio of 3,282 between its CEO and median employee, a company whose various discrimination tactics within hiring and staffing practices were recently brought to light this year in a Netflix documentary.
14 major Ohio corporations, including Walmart, Ohio’s biggest employer, reported a median pay on or below the federal poverty level for a family of four, paying workers less than $26,500 a year. Combined, these 14 corporations employ 146,000 Ohioans. Meanwhile, CEOs of these major companies continue to rack in more and more money.
“Last year corporate price gouging made it harder for many Ohioans to make ends meet, but many of the CEOs driving the problem did better than ever,” said lead report author Michael Shields. “Not only are CEOs getting richer by driving up prices, but they’re also doing it by holding down worker pay, simply because they have the power to do it.”
CEOs have been able to accumulate such wealth due to several factors. CEOs significantly influence board decisions and, therefore, can set their own pay rate.
Corporations use once illegal tactics, under previous Securities and Exchange regulations, to manipulate stock values and buyback shares. This tactic is also mostly tax-free for corporations. Within the last few years, many corporations changed rules surrounding executive pay to protect CEO’s pay during the early days of the pandemic, while workers sought unemployment and dealt with unsafe work practices.
With the rise of globalization due to tax and trade policies, multinational corporations have gained access to the least protected and lowest paid workers globally. Lawmakers removed policies that allowed for a fair and balanced working environment including “right to work” laws. This undercut the bargaining power of the working class, leading to fall in unions and allowing CEOs to capture a larger share of the income corporation produced over the recent decades.
Despite corporate effects, various employees of Ohio corporations are fighting back against low pay and unfair practices. For instance, 12,000 Kroger employees voted to strike, and Starbucks workers across the state sought to unionize. Additionally, Ohio Amazon workers have faced workplace injuries at double the rate for the warehouse industry, leading 41,000 employees seeking to organize a union.
Many Americans, with the majority of Republicans (62%) and Democrats (75%), support an outright cap on CEO pay.
“It’s no surprise that some of the corporations that pay their CEOs the most astronomical salaries are the same ones under fire for how they treat rank and file employees,” Shields said. “CEO pay helps concentrate wealth in the hands of the very few – most of whom are white men and are often removed from the day-to-day experience of the low-paid workers who are more likely to be women and people of color. Policymakers should make broadly shared prosperity for people of all races and genders their top priority. They can penalize corporations for outsized CEO pay, end stock buybacks, and rewrite the rules so working people are paid enough to provide for themselves and their families.”
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