How much of an income gap exists between tech-company CEOs and the software engineers who actually drive the business?
Business.org recently crunched the numbers on CEO salaries, and then compared those executives’ per-hour earnings to the hourly wages for the most popular jobs at their respective companies. For example, it matched up Amazon CEO Jeff Bezos’s $1.6 million per year against an Amazon warehouse associate’s annual earnings of $27,206; the latter would need to work 62 hours in order to earn the equivalent of one hour of Bezos’s pay.
And Bezos is something of an outlier, as he “only” takes that $1.6 million; the vast bulk of his wealth comes from Amazon stock (and because that’s risen so stratospherically in recent years, he’s now the world’s richest man). A Netflix customer service rep ($29,141 per year) would need to work 2,338 hours in order to equal one hour of Netflix CEO Reed Hastings’s income (Hastings makes $36 million per year).
But we’re not necessarily interested in each of these tech firms’ most “popular” jobs; we want to see how CEO salaries match up against software engineer income. For the latter, we consulted Glassdoor, which crowd-sources its salary info.
Good news! The income gap between “average” software engineer salaries and CEO pay is much narrower than for the “popular jobs” at these respective companies.
But there’s bad news! Income-wise, CEOs still earn an insane multiple over what software engineers make, even if the engineers earn over $100,000 per year. Check out the chart below. (We calculated the per-hour for software engineers off a 40-hour workweek for 52 weeks per year, per business.org’s original methodology.)
Software engineers earn a good deal of compensation (especially when you consider the stock options and bonuses they rack up on top of these salaries), and yet their salaries still look paltry in comparison to CEOs.
But we knew that, of course—and the income disparity isn’t limited to tech. In May, a study by the Associated Press found that CEOs at S&P 500 companies made a median salary of $12 million last year—not only base pay, but also stock grants and “other compensation.”
“Pay for typical workers at these companies isn’t rising nearly as quickly,” the Associated Press added at the time. “The median increase was 3 [percent] last year, less than half the growth for the top bosses. Median means half were larger, and half were smaller.”
Meanwhile, according to the 2019 Dice Salary Survey, the average tech pro earned $93,244 in 2018—a mere 0.6 percent increase from 2017. That’s a good average income in many places around the country, but it’s a drop in the bucket compared to CEO take-home.