What Corporations Actually Pay Their Employees

[Jack Ryan]

Have you ever wondered what the typical coding whiz makes at Google? What about a rank-and-file chocolatier at a Hershey factory? Or the standard refinery worker at Exxon Mobil? 

Well wonder no longer, because we've got data. 

For the first time ever, public companies were required to spill the beans on what they paid their median employee in 2017 (in addition to executive compensation). 

• That's a result of a Dodd-Frank mandate coming into effect. The idea is that more transparency around salaries (especially the pay ratio between the CEO/median worker) might dampen the corporate greed that contributed to the financial crisis. 

But before you read on, keep this in mind: The law gives corporations flexibility in how they report the numbers. So do you include paid time off in the calculations? Equity? Bonuses? Just base salary? There's no perfect formula here, and companies definitely took advantage to paint themselves in the most flattering light.

Alright, enough backstory...let's cut right to the chase 

Here are three major takeaways (from an excellent WSJ analysis):

1. Pharma pays. Yeah, you probably shouldn't have skipped that CHEM223 lecture. Of the four S&P companies whose average worker made over $200,000, three develop drugs (Incyte, Celgene, and Vertex Pharmaceuticals). The fourth company on that list? Facebook. 
2. Size matters. If you're looking to maximize your salary, narrow your job search to companies that have about 17,000 employees—that's the sweet spot where you'll see the best-paying jobs. The larger corporations (average 82,000 employees) have the lowest median pay. 
3. Geography? Also matters. It shouldn't come as a surprise that workers around the world are paid relative to how developed their country's economy is. So multinationals that employ many workers in less wealthy countries than the U.S. (think manufacturers) will have a lower median wage. 

Exhibit A: The typical worker at whitey tighty-maker Hanesbrands (~90% of employees work internationally) is an equipment operator in Honduras. She makes $5,237 a year. 

And things get interesting when you compare the median worker to the CEO

The NYTimes found that the median Walmart employee (salary $19,177) would need to work a long time—try more than 1,000 years—to make as much as CEO Doug McMillon's 2017 pay ($22.2 million). 

Then there's Time Warner, where the typical worker does just fine with a salary of $75,217. But they'll still need to put in a few overtime hours (right around 651 years) to hit the $49 million annual pay for CEO Jeff Bewkes.

Bottom line: These new disclosures are important to the broader debate on how corporate profits are distributed among workers. For now, we can all agree the more information...the better.