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Many corporate chief executive officers ('CEOs') on record cite increasing labor costs as justification for recent price increases and inflation. However, a recent report examined data such as increases in prices, increases in CEO salary, increases in labor compensation and the gap between CEO salary and employee wages. The findings? CEO salary and the CEO/worker pay gap (the ratio of CEO salary to employee wage rate) exorbitantly increased, with some companies even cutting workers' wages. This leads many to question the root of inflation and wondering if individual and corporate greed - not labor costs - largely help explain today's runaway rate of inflation. Here is a small sampling of some results of the analysis.
Amazon. Amazon's CEO's compensation increased 600%, the net worth of Amazon's founder increased 77% to $210 billion, and the CEO wage gap increased 11,000%. Now, Amazon's CEO earns as much as approximately 6,500 employees. At the same time, Amazon increased both prices and the cost of its Amazon prime membership.
Apple. Apple's CEO's compensation increased 568% to $98.7 million per year. The CEO pay gap increased by 464% and Apple's CEO now makes $1,447 dollars for every $1 an Apple worker makes. At the same time, Apple increased the prices of newer iPhone models citing increasing costs of labor.
Verizon. Verizon's CEO pay gap now is 166-1, a 48% increase. At the same time, the annual salary of a Verizon worker now is $48,000, a reduction of 28% relative to previous levels. Verizon communicated to investors concerns over rising labor rates and the need to pass through such in prices.
McDonald's. McDonald's profit rose to $7.55 billion last year, a 59% increase. McDonald's used $4.7 billion of that to reward shareholders through stock buybacks. McDonald's CEO salary exceeded $20 million, 2,251 times more than that of a middle salary worker whose salary fell last year. McDonald's will continue to increase prices indicating this will not harm profitability as they pass these costs on to consumers.
Starbucks. Starbuck's CEO's pay increased to $20.4 million, a 39% increase and now 1,579 times more than the median employee. Starbucks raised prices last year and saw profits increase 352%. At the same time, Starbucks fights employee unionization efforts.
Domino's. Domino's CEO salary increased to $7.1 million last year, 400 times more than the average worker, whose pay fell to $17,782 per year from $22,076 per year.
PepsiCo. PepsiCo's CEO salary increased to $25.5 million, up $4 million. Its profits rose nearly $500 million to $7.6 billion a year, which it distributed to shareholders through dividends and stock buybacks. PepsiCo indicates it will continue raising prices through 2022, and its CEO now makes 488 times more than its median employee.
Kraft Heinz. Kraft Heinz's CEO received a 40% increase in salary, to $8.6 million. At the same time, the company increased product prices citing supply-chain and labor constraints. The company's profit rose $183 million to over $1 billion, and its CEO makes nearly 200 times more than the median employee.
