CEO-to-worker pay – A U.S. law requires companies to disclose the ratio between CEO compensation and pay for the median worker. The numbers—ranging widely across major firms—can signal culture, and some organizations like Spain’s Mondragon show that companies can design that gap
The number is buried in the fine print of a proxy statement—yet it becomes impossible to ignore once someone looks.
Under U.S. law, public companies are required to publish a single figure: the ratio between what they pay their CEO and what they pay their median worker. The rule has been in force since 2017, and the ratio appears in every proxy statement on the exchange.
For many leaders, the ratio doesn’t feel like something they can recite. “Most leaders cannot tell you their own,” the story goes. And when the figure is finally checked, it often reads less like arithmetic and more like a verdict.
In 2024, the average ratio across the S&P 500 was 285 to 1. At the hundred lowest-paying large firms, the average was 632 to 1. At Starbucks, it once reached 6,666 to 1. The comparison goes even further back: in 1965, the same ratio was about 21 to 1.
The easy reading of these statistics is moral. If a CEO earns 285 times the median worker’s pay. the gap can be treated as a company’s declared judgment about how much different people are “worth.” But that frame also ends discussion quickly. leaving little room for honest engagement inside the company—especially because no one wants to be the person standing on the “horns” side of a simple story.
A more useful way to read the ratio is mechanical. The number isn’t always the product of one deliberate decision. It is the sum of many compensation choices made one at a time by people who often aren’t thinking in ratio terms as they act. Even so, the outcome has a way of reflecting culture.
The question becomes harder: if the ratio is such a signal, why doesn’t it change?
There is a comforting answer for boards: the board members approving compensation packages aren’t trying to protect their own pay. Directors are generally trying to hire the person they believe will make the company worth more. and the way they do that usually follows the same playbook as others. They pull comparison data. look at what peer companies pay their CEOs. and position the package near the middle—because explaining why a board paid below market for the person running the company can be uncomfortable.
But the design of the benchmark has a blind spot built in. The method compares CEO pay to CEO pay. No one in that room compares the ratio to other ratios.
The flaw isn’t an isolated mistake. It shows up in the habit behind setting pay: benchmarking the top against other tops, while never benchmarking the relationship between the top and the bottom. The result is that the ratio becomes the one number nobody’s job is to look at.
And yet it doesn’t have to be this way.
Mondragon—described as a cooperative federation in the Basque region of Spain—caps the ratio between its highest and lowest paid to six. It employs tens of thousands of people, has run for roughly seventy years, and is described as profitable. The account says Mondragon has also outlasted recessions that took down conventional firms. The cap, the story stresses, is not charity; it is a design choice that someone decided to benchmark and defend.
The piece brings the argument down to a question that is both simple and politically sharp: what ratio between the highest-paid and lowest-paid employee would the leadership team defend in writing, with their name on it, to the entire workforce?
If a company does not know its current ratio, the ratio itself becomes information. If leaders do know it and would not defend it openly, that is information too. The logic is blunt: a ratio you won’t say out loud implies hiding something.
It also challenges an assumption that often gets repeated in fairness debates. People are not asking to earn what executives earn. Decades of research on workplace fairness are cited as pointing to the same conclusion: employees will live with a gap. even a wide one. as long as the process behind it feels honest and someone can explain it without flinching.
What people will not forgive, the argument continues, is a number no one accounts for. When the reasoning is missing, workers do not assume the best. They fill the blank with distrust, fear, and anxiety.
A ratio leadership can defend out loud is framed as a ratio people can live with. Fairness, the story says, was never sameness. Fairness is a gap somebody is willing to put their name on.
The “architecture” of the current system is presented as the core problem. Blaming individuals may feel more satisfying, but architecture is described as something that can be redesigned—because a system that was designed can be redesigned.
CEO pay ratio median worker pay proxy statements S&P 500 executive compensation workplace fairness Mondragon governance transparency compensation benchmarks
So it’s basically how greedy they are, right?
I didn’t even know they had to post that. 285 to 1 is wild. Like how is that supposed to build trust when most workers can’t even breathe after rent?
The ratio sounds made up though, because “median worker” depends on who they include. If they pick different employees it changes the whole thing. Also Starbucks 6,666 to 1?? That seems like a typo or something.
This whole thing is buried “in fine print” which is exactly the problem. People should just be able to see pay gaps right on the homepage. And the Mondragon example sounds nice but like, that’s Spain, not here, so it won’t work. CEOs always say it’s “performance” but the math is still gross.