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Last year, Wal-Mart CEO Lee Scott earned $29.7 million in total compensation, or 1,551 times the annual income of the average full time Wal-Mart Associate.
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I've been thinking about that fact for awhile, and I've drawn a couple of conclusions. Whenever I hear people complain about "overpaid sports figures" I'm always reminded of the book and movie
Eight Men Out. Back in the day athletes were the slaves of the team owners. If they wanted to play they took what they were payed, and they were screwed so often that in 1919 the "couldn't be beat" Chicago White Sox threw the world series because a consortium of gamblers offered them enough money to make it worth their while. Today if a team wants a certain player they have to give him what he wants or look elsewhere. Is he "overpaid"? The people who actually pay him don't think so.
It's the same with a CEO. They pay him what he thinks he's worth because he's the one who can actually make things happen, and bring money into the business. If he doesn't do the job then they find somebody who can.
On another tack, I got to thinking about that $29,700,000, and I did a little research of my own. This is from Walmart's own website:
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Walmart employs more than 2.1 million associates worldwide, including more than 1.4 million in the United States. Walmart is not only one of the largest private employers in the U.S., but the largest in Mexico and one of the largest in Canada as well.
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If we lower the CEO's salary to match that of the lowest-paid employe, and distribute the money fairly, every single Walmart associate will pick up an extra $14.15. A year. If we do that to every ranking officer all the way down to store managers, i.e. they all make the same wage, they might pick up as much as $500 per year. And then they'll go out of business because no qualified CEO is going to work for that amount.
Want more money? Go to school. I wish I had.