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PayScale – The $1 CEO Salary Myth: CEO Salaries vs. Worker Salaries


The $1 CEO Salary Myth: CEO Salaries vs. Worker Salaries

CEOs get best of both worlds: killer compensation and perks. But are their employees getting their fair share?

UPDATE: See PayScale's infographic of CEO-to-worker pay.

By Chantal Fleming, Special to

Private jets, jaw-dropping bonuses, fat paychecks, and priceless stock options: This is just a day in the life of a big-time American CEO.

Do You Know What You're Worth?

The chief execs of America's 500 biggest companies received a collective 38% pay raise last year to total $7.5 billion, according to Forbes magazine. That averages out to a whopping $15.2 million each. Base salary is typically a fraction of a CEOs take-home pay, with bonus and stock options accounting for the bulk.

Ever wonder how most people's compensation stacks up against the big cheese in their company? took a look at three well-known and highly paid CEOs – and some common positions within their companies — to find out.

Steve Jobs, Age 52

Apple CEO Steve Jobs voluntarily draws a $1 salary with the rest of his compensation determined by company performance. But don't let the chief apple's paltry salary fool you. He is the highest paid U.S. CEO. Jobs raked in a reported $647 million from vested restricted stock in 2006. Given Apple's banner year with the iPhone and stock prices that have nearly doubled, he will likely have more to smile about come bonus time.

Jobs' salary does circles around the average annual salary for a software engineer in California with one to four years experience. shows:

Total Cash Compensation
Average Salary: $67,613
Salary Range: $58,153 – $76,120

The pay for a sales associate with one to four years experience in New York City is even starker:

Average Hourly Rate: $9.32
Hourly Rate Range: $7.75 – $10.66

Average Annual Bonus: $1,984
Annual Bonus Range: $437.72 – $2,832

Oprah Winfrey, Age 53

Media magnate Oprah Winfrey tops Forbes 2007 Celebrity 100 list of the most powerful and paid people in Hollywood, earning $260 million last year. She is president of Harpo Productions, Inc.; The Oprah Winfrey Show, Oprah After the Show, O magazine, Dr. Phil, The Rachel Ray Show, and Harpo Films fall under its umbrella.

Oprah had — and others in the journalism industry have — a long haul to hit the billionaire mark. shows the average salaries for an editorial writer with one to four years experience in Los Angeles is:

Total Cash Compensation
Average Salary: $47,473
Salary Range: $37,269 – $56,165

Michael S. Jeffries, Age 63

Abercromie & Fitch CEO Michael Jeffries cashes in as one of the 10 highest paid CEOs. Reports show his total compensation was $114 million last year. The retail chief is known for his quirky style and to-die-for CEO perks, such as extensive use of a corporate jet.

The average retail store department manager has to sell a lot of jeans to compete with Jeffries' salary. shows the average annual salary for this job in New York City with one to four years experience is:

Total Cash Compensation
Average Salary: $44,156
Salary Range: $35,284 – $50,744

The disparity between CEO compensation and pay for the "average Joe" is stratospheric. But believe it or not, all three of these CEO dynamos were also once — regular employees.

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