Top executive at the firm earns a staggering 6,666% more than an average employee, drawing significant pay disparity criticism.
In the latest AFL-CIO's Executive Paywatch report for 2024, the substantial pay gap between CEOs and typical employees at the largest public companies in the United States has been brought to light. The report reveals that the average CEO at S&P 500 companies earned an astounding $18.9 million in total compensation, which is 285 times the median worker's income of $49,500.
This ratio represents a significant increase from the previous year's 268:1[1][2]. The report highlights the extreme case of Starbucks, where the CEO's compensation was 6,666 times that of the median employee[1][3]. Starbucks CEO Brian Niccol received approximately $98 million in compensation last year, making the pay gap between him and the typical Starbucks employee the widest among the nation's 500 largest public companies listed in the report.
The report also points out that nearly half of the top executives' total pay is restricted stock awards, and another $4 million are bonuses[4]. In contrast, the typical Starbucks employee earned less than $15,000 last year[5].
The AFL-CIO's report underscores that the tax and spending cuts package signed by President Donald Trump in July 2019 provides CEOs with larger tax breaks than workers. The average CEO will receive a tax cut of nearly $490,000 from the permanent extension of lower individual income tax rates, while the typical US worker will receive a $765 tax break[6].
The report does not provide information on the tax breaks received by typical Starbucks employees or the CEO, Brian Niccol. However, it does mention that some Starbucks employees have formed a union, Starbucks Workers United, and have staged strikes at various locations[3]. The demands of this union include a wage increase.
The report does not specify the wage increase demands of Starbucks Workers United in comparison to the average wage increase for typical workers. It is important to note that the calculation of the median employee's compensation at Starbucks includes its global workforce of about 361,000 staffers, not just the roughly 210,000 US-based workers[7].
Fred Redmond, AFL-CIO's secretary-treasurer, stated that the wage disparity at Starbucks fuels economic inequality[8]. The report concludes that the pay gap between CEOs and typical workers grew larger in 2024 compared to the previous year.
[1] AFL-CIO's Executive Paywatch for 2024 [2] CEO pay at S&P 500 companies increased by 7% in 2024 from the prior year. [3] Some Starbucks employees have formed a union, Starbucks Workers United, and have staged strikes at various locations. [4] Nearly half of the top executives' total pay is restricted stock awards, and another $4 million are bonuses. [5] The typical Starbucks employee earned less than $15,000 last year, according to the AFL-CIO's Executive Paywatch report. [6] The average CEO will receive a tax cut of nearly $490,000 from the permanent extension of lower individual income tax rates, while the typical US worker will receive a $765 tax break. [7] The calculation of the median employee’s compensation at Starbucks includes its global workforce of about 361,000 staffers, not just the roughly 210,000 US-based workers. [8] Fred Redmond, AFL-CIO's secretary-treasurer, stated that the wage disparity at Starbucks fuels economic inequality.
- The financial disparity between CEOs and typical workers, as highlighted by the AFL-CIO's Executive Paywatch report, raises questions about the impact of such gaps on business, politics, and general news, given their potential influence on economic equality.
- In the context of the increasing pay gap between CEOs and typical workers, as seen in the AFL-CIO's Executive Paywatch report, the general news landscape could potentially focus on the role of business and politics in shaping these disparities and the potential for unions like Starbucks Workers United to advocate for change.
