NFL Commissioner Roger Goodell took a pay cut last year. Before you feel too bad for him, however, keep in mind that even after a $1 million cut, Goodell made $34.1 million over the 2014-5 season – more than every football player in the league, save Atlanta Falcons QB Matt Ryan, whose signing bonus brought his pay up to $36.5 million. Why are we even paying attention to millionaires, when the average American worker would be happy to score more than a 3 percent annual raise? Well, the commish-to-player pay ratio reminds us that the guys at the top of the corporate ladder often far out-earn the people whose work keeps them there. In short, it’s not just that the CEO makes more than you do; it’s that the CEO makes a lot more than you do.
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PayScale’s 2014 report, CEO-to-Worker Pay Ratios, compares the salary of employees at America’s top-earning companies with their CEOs’ pay, and shows that Goodell is in good company.
In fact, nearly a quarter of top 100 companies have CEO-to-worker pay ratios of 100:1 or more, meaning that the big boss earns 100 times more than the typical salary at his company. CVS Caremark, the company with the largest CEO-to-worker pay gap in 2014, had a ratio of 422:1, with the average employee making $28,700 annually and the CEO pulling down $12 million a year. By comparison, Money Nation reports that the typical NFL salary was $860,000 for 2015 – not Matt Ryan money, but not regular worker pay, either. That means the NFL commissioner-to-player pay ratio is about 40:1.
The Risks Are Greater at the Bottom
Roger Goodell has made $180.5 mill in his 1st 9 yrs as commish? And ppl say the players ask for too much cash. How many hits has he taken?
— Sen’Derrick Marks (@senmarks) February 16, 2016
Of course, it’s not just what you make – it’s what you have to do to earn your money. As Jaguars defensive tackle Sen’Derrick Marks points out, Roger Goodell has never had to risk a concussion in order to get his check. Neither will most workers, but regardless of whether your job consists of taking hits or processing TPS reports, you’re in a tougher spot than your boss’s boss’s boss.
Why? Because, if you’re like a lot of American workers – 76 percent, as of 2013, according to Bankrate.com – you live paycheck to paycheck. The reasons for this are many, varied, and constantly disputed by economists and experts, but one big factor is the value of what we make: PayScale’s Real Wage Index, which measures workers’ earnings with inflation taken into account, shows that the buying power of worker pay has declined 6.9 percent since 2006.
CEO pay, on the other hand, continues to rise.
“From 1978 to 2013, CEO compensation, inflation-adjusted, increased 937 percent, a rise more than double stock market growth and substantially greater than the painfully slow 10.2 percent growth in a typical worker’s compensation over the same period,” write Alyssa Davis and Lawrence Mishel at The Economic Policy Institute.
Top executive roles at high-earning companies may also come with golden parachutes, contract provisions that soften the blow in the event of sudden unemployment. Needless to say, the average worker’s contract does not.
NFL players have it a little better than we do, of course: if they’re injured, for example, they might earn their full salary if they’re veteran players. (Rookies who are selected in the third round or later typically have salaries that pay them a reduced rate for down time.)
Regardless, professional athletes have brief careers, and football players briefer than most. No wonder that 78 percent of NFL players find themselves under financial stress within two years of their pro careers’ end.
The Commissioner, on the other hand, would probably find it a challenge to run through $180 million. In this, if in nothing else, Roger Goodell and your CEO are a lot alike.
Tell Us What You Think
Do you think it matters that CEOs make so much more than workers, or is that just capitalism, baby? We want to hear from you! Leave a comment or join the discussion on Twitter.