We don’t know how much GM CEO Mary Barra made in 2018 yet, but looking at her compensation for 2017, she made a whopping 295 times more than the median GM employee.
The Detroit News began to compile the compensation of Michigan’s top executives in a Monday report. Since GM has not filed its documents the federal government requires after the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act passed, we can only use 2017 number so far. Last year, Barra made just shy of $22 million. The average GM employee makes $74,487 annually.
The disparity has opened arguments into ensuring regular workers receive fair wages and how governments and companies need to ensure the pay gap continues to close. GM, however, may not be the best example. A $75,000 annual salary is rather healthy. Lear is a better example, where the CEO made almost $10 million last year, while the average worker made $10,000, or a ratio of 987:1.
Of the top executives in Michigan, Barra was the highest compensated of them all. Ford’s CEO, Jim Hackett, made $17.7 million in 2018. Ford has already filed its executive pay documents for 2018. Fiat Chrysler Automobiles is not required to file the documents since the company is headquartered globally in Italy.
While some use the information to bolster arguments for higher wages, others disagree. Edwin Locke, professor emeritus at the University of Maryland’s Robert H. Smith School of Business, said in the report that a good CEO is “priceless.” If an organization taps an unqualified CEO, he or she could take the entire operation down with them. That leaves zero jobs and no wages for workers. High salaries are one way to attract good talent to top positions inside of companies.
Locke added there’s no “objectively correct” ratio between a CEO and an average worker.
Source: The Detroit News