Starbucks CEO's annual income exceeds that of his employees by a factor of 6666. - Sky-high executive pay: Starbucks CEO earns 666 times that of his employees' average wage
In a recent report, the AFL-CIO, the largest U.S. labor union, has criticized the enormous wage gap between CEOs and ordinary employees in S&P 500 companies. The average wage gap in 2024 stands at approximately 285-to-1, with S&P 500 CEOs earning an average of $18.9 million in total compensation, while the median worker takes home around $66,000 to $67,000 per year.
Starbucks, the coffee giant, stands out as an extreme example of this disparity. In 2024, the company's CEO, Brian Niccol, earned nearly $98 million, a figure that is 6,666 times more than the median Starbucks employee's annual wage of roughly $14,674.
The wage gap is particularly large at Abercrombie, where CEO Fran Horowitz earns 6,731 times more than her average textile worker. Among the S&P 500 companies, the CEOs of Aptiv, ON Semiconductor, and Coca-Cola each earn around 2,000 times more than their ordinary employees, following Starbucks' CEO in the wage gap ranking.
The wage gap has been on the rise. In 2021, the average CEO of the 500 largest publicly traded U.S. companies (S&P 500) earned $18.9 million, a figure that represents a 285-to-1 ratio compared to the typical worker's earnings. This is an increase from the previous year's ratio of 268-to-1.
The majority of Niccol's 2021 earnings were due to a generous welcome bonus and a stock package. If an average Starbucks employee were to start working at Starbucks in 4643 BC, they would still not have earned what Niccol made in 2021 alone.
In an effort to personalize their coffee cups, Starbucks employees are now writing names, smileys, and small messages instead of sticking on labels. Seattle, the headquarters of Starbucks, has seen this change.
The recent tax cuts implemented by U.S. President Donald Trump are predicted to widen the gap between the rich and the poor. The average CEO will save around $490,000 in taxes per year, while the typical U.S. worker will only save $765.
Brian Niccol, who previously served as the CEO of Chipotle, became CEO of Starbucks in September 2021. Around 200,000 new pens were made for this purpose, allowing employees to add personal touches to each cup.
In conclusion, the AFL-CIO's report sheds light on the significant wage gap within S&P 500 companies, with Starbucks serving as a notable example. The stark contrast in earnings between CEOs and their typical workers highlights the need for further discussion and potential action to address this issue.
| Measure | CEO Annual Compensation | Median Worker Compensation | CEO-to-Worker Pay Ratio | |-----------------------------|-------------------------|----------------------------|------------------------| | Average S&P 500 (2024) | $18.9 million | ~$66,000 | 285:1 | | Starbucks (2024) | ~$98 million | ~$14,674 | 6,666:1 |
- The European Parliament, the Council, and the Commission have expressed concerns over the rising wage gap in S&P 500 companies, as highlighted in a recent AFL-CIO report.
- In the realm of finance and wealth-management business, personal-finance policies and legislation are under scrutiny due to the enormous wealth disparities exposed in the report.
- The wage gap, a virtually incomparable difference in earnings between CEOs and ordinary employees, has increased from 268-to-1 in 2021 to 285-to-1 in 2024.
- The politics of general news have been focused on the widening gap between the rich and the poor, with the implementation of tax cuts predicted to aggravate this issue in the United States.
