Revisiting Income Inequities And The CEO Employee Gap - Portfolio.com

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Revisiting Income Inequities And The Ceo Employee Gap - Portfolio.com (blog)


I just noticed the following piece of this article....can you spot the flaw in the value calculations?


 


The lowest ratio was in 1971, the second year tracked in Murphy's
research. That year, the ratio between a CEO and an employee was 30.6
percent (averages of $212,230 vs. $6,540). The high point was in 2000,
when the ratio was 557.6 percent (averages of $13.9 million vs.
$25,010).




The last year for which Murphy has done the calculation is
2009. The ratio was 264.4 percent—the smallest difference between CEO
and employee in 13 years. Average compensation in 2009 was $8.47 million
while the average worker made just over $32,000. One note: Included in a
CEO's compensation were stock options granted, and Murphy figured their
worth based on the date they were granted.


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Dan Walter
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