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AT&T Chief Executive Makes 366 Times More Than Typical Worker

A new rule requires public companies to disclose a ratio comparing the pay of CEOs and their median employees. We look at some of Dallas' biggest companies.
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AT&T CEO Randall Stephenson made 366 times as much as the Dallas-based company’s median worker last year, according to documents filed with the SEC this week. That’s $28.7 million in compensation for Stephenson compared to a median salary for employees of a little more than $78,000 in 2017.

While the chasm between average executive and worker paychecks has made headlines for years, expect to see more specific numbers in the coming weeks and months, as public companies begin filing their annual proxy reports. That’s because of a new requirement, originally stipulated in the Dodd-Frank law passed after the 2008 financial crisis but only approved after years of pushback from big business, that publicly traded companies disclose the exact pay ratio of chief executives and their average employees.

We don’t yet know the executive-worker pay ratio of some of North Texas’ Fortune 500 companies, like Exxon Mobil and American Airlines. Others have already filed. For example, the CEO of Fluor Corp, the Irving-based engineering and construction company, was compensated for more than $10 million in 2017, making 152 times more than that company’s median employee.

Navigating the online SEC filings is headache-inducing, but if you work for a public company in North Texas, you can compare your own salary to the median and CEO pay. Start off on the SEC website, and then search for the company by name. You’re looking for the most recent annual proxy report marked “DEF 14A.” From there, a “CTRL-F” search for “pay ratio” should take you to what you’re looking for.

AT&T CEO Randall Stephenson.

We already have some idea of what the numbers will look like. Ahead of the new pay ratio disclosure requirement going into effect, the compensation data firm Equilar conducted an anonymous survey of more than 350 companies, finding that the median CEO-worker pay ratio is 140:1. The median in the Southwest, including Texas, is 120:1. Equilar summed up the results of its survey like this:

  • The median CEO pay ratio across all 356 submitting companies was 140:1. At the 25th percentile, the ratio was 72:1, and was 246:1 at the 75th percentile. The average was 241:1.
  • Median employee compensation for all companies in the survey was $60,000.
  • The median CEO pay ratio was larger in direct correlation to company revenue, totaling 47:1 for companies below $1 billion in revenue and 263:1 for companies above $15 billion in revenue.
  • Similarly, companies with the greatest number of employees had the largest ratio (318:1) and the smallest median employee compensation ($46,000). The smallest companies, with fewer than 2,310 employees, had the lowest ratio (45:1) and highest median pay ($85,580). Equilar split companies by employee size into five equal quintiles for this particular analysis.

These pay ratios should provide further fuel for the debate over income inequality. In AT&T’s case, one could compare the press a 366:1 CEO-worker pay ratio will get with the news coverage of the company handing out $1,000 bonuses to all of its more than 200,000 employees, as well as the subsequent coverage of more than 600 layoffs. But a Washington Post story from last month points out that the most significant reactions may come from within the companies themselves. How will lower-paid workers respond when they can compare their salary both to the company’s chief executive, and to its median employee?

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