To receive updates and stay connected to Policy Matters Ohio, sign up here!

Research & Policy
Policy Matters Ohio

Big Ohio CEOs: 306, Median employee: 1

December 10, 2020

Big Ohio CEOs: 306, Median employee: 1

December 10, 2020

Ohio’s largest employers paid CEOs $14.6 million on average

Michael Shields | Siyang Liu

It takes everyone’s work to make an enterprise run. The janitors keeping office buildings clean make it safe for everyone else to come work. Without retail store clerks, big clothing chains would go without a key way to sell their merchandise. Today, many Ohioans performing critical jobs aren’t paid enough to make ends meet, but the CEOs of the companies they work for are paid more than ever. Both of the most recent downturns have hit low- and middle-income people harder — and likely for much longer — exacerbating a decades-long trend that has separated the economic fortunes of the wealthiest from those of everyone else. The stock market rebounded from the COVID-19 recession in record time.[1] Likewise, in the aftermath of the Great Recession, the wealthiest were the first to recover: Three years into the recovery, the top one-percent had captured 71.9% of all new Ohio income growth in the recovery.[2] The post-recession growth was characterized as a “jobless recovery” that took eight years, until October 2015, to restore the number of jobs shed by Ohio employers after June 2007.[3] Ohio has never recovered all those lost in the 2001 recession.

The CEOs of America’s largest firms are among the few who have benefitted from this growing fissure between the rich and the rest of us. For the past several decades, corporate boards have increased pay for CEOs faster than the economy has grown, while income for most Americans and Ohioans has been held down. This trend illustrates that growth in CEO pay does not reflect productivity growth in CEO performance or growth of their skills, but instead is largely the result of CEOs’ ability to set their own pay. It is a leading cause of growth in inequality.[4] The typical person working at one of Ohio’s biggest employers makes more than the typical worker statewide, but many workers at Ohio’s largest employers are paid wages below the poverty level. Today many CEOs bank windfalls as they preside over corporations that offer no paid sick time or hazard pay in the middle of a pandemic.

Among the 54 of Ohio’s 100 largest employers that reported to the Securities & Exchange Commission, the median chief executive officer was paid 306 times the rate of the median worker.[5] Most corporations paid their CEO more than 200 times what they paid typical employees last year. More than a quarter of them paid their CEO more than 500 times as much. Six companies paid their CEO more than 1,000 times more than their median employee. Corporations have paid CEOs at a dramatically escalating rate in comparison to regular workers, even out-pacing the S&P 500 stock index. Using regression analysis, As You Sow, a nonprofit that promotes corporate responsibility, found that 15 of the 100 most overpaid CEOs based on company performance each took home over $20 million more than they would have if their pay had been benchmarked to the profitability of their companies measured by Total Shareholder Return.[6]

Key Findings

The median CEO at Ohio’s largest employers who report to the SEC made 306 times as much as the median worker at the same firm. 72% had pay ratios of at least 200-to-1.

Average pay among CEOs at Ohio’s 54 largest employers that file reports with the SEC was $14.6 million.

30% of the top reporting employers paid their median worker less than $25,000 per year. The median worker could be part time, and not based in Ohio. Retail companies dominated low-pay employers among top firms.

Corporations have increased pay for CEOs faster than most workers’ pay over the past four decades: Ohio’s 306-to-1, and 320-to-1 for the nation, compares with national figures of 21-to-1 in 1965 and 61-to-1 in 1989.[1] Median pay for Ohio workers grew 3.9%, and 15.1% nationally since 1979. Median pay at top Ohio employers exceeds the statewide median by about a third.

Nationally, a minority of Russell 3000 CEOs took any pay cuts in response to COVID-19, while many firms forced pay cuts or layoffs for workers, or worked frontline workers at pay rates below the poverty line.

Some major Ohio employers staffing frontline workers offered limited sick pay that was difficult to access. Some offered hazard pay policies beginning in the spring, and have now generally suspended them.

Policymakers at all levels of government can take action to restore more balance to our economy and make sure all people are paid a fair return on their work. They can tax corporations that pay CEOs exorbitantly compared to the rest of employees — and leverage the revenue to build stronger communities by funding things like public schools and health care. Policymakers can prioritize granting public contracts only to corporations that pay workers fairly. They can raise the minimum wage and mandate all working people can take paid time off to welcome a new child, recover from a long-term illness or take care of an ailing loved one. Ohio’s public pension funds also have a role to play. They can press harder for reasonable CEO pay. CEOs at Ohio’s biggest corporations can treat all their employees fairly and still enjoy salaries higher than most people could ever imagine. There is enough to go around. It’s up to our leaders to stop allowing it all to flow to the very top.

The companies

Starting in 2017, publicly traded companies were required by the Dodd-Frank Act to report the ratio of CEO pay to that of their median worker — the one whose pay falls in the middle of all employees. The data show enormous disparities, which have grown compared with national figures in the past. Policy Matters Ohio reviewed the filings of companies that rank among the top 100 Ohio employers, according to the Ohio Development Services Agency as reported for 2018,[7] and Ohio-based Fortune 500 companies.[8] Altogether, 54 filed reports with the SEC. Many of the top 100 employers do not have to file such reports either because they are nonprofits (for example, the Cleveland Clinic), government employers (Wright-Patterson Air Force Base), privately owned (Giant Eagle) or foreign companies (Honda). Seven companies, including Procter & Gamble and Cardinal Health, reported ratios for fiscal years ending before Dec. 31, and were not required to report their first pay ratios until later in 2018. In keeping with our previous reports, we have used their reports for the prior fiscal year, in this case 2019, for analysis. As last year, we have used the 2018 list of employers, the most recent one compiled by the state. Two of the companies profiled in last year’s report were subsequently acquired, and thus did not report their own filings for 2019. AK Steel Holding was bought by Cleveland-Cliffs in December 2019,[9] and Cincinnati Bell was acquired by Macquarie Infrastructure and Real Assets ("MIRA") in March 2020.[10]

The data

The median worker is the one in the middle: Half of the company’s employees made more, and half made less. The median worker could be employed anywhere in the company’s workforce, and often is not located in Ohio. Dodd-Frank rules allow companies to set aside up to 5% of their workforce in making the calculation. Reporting requirements are not strictly standardized, with the result that some firms include benefits or bonuses in the calculation, while others do not. Rules also allow companies to use the same median employee for up to three years, even if a change in that worker or others’ pay means they are no longer the middle worker. For these reasons, comparisons between companies are tricky (and we do not rank order them); but the overall picture is clear: Among major Ohio employers and Fortune 500 companies, the pay disparity between CEOs and regular workers is enormous and growing.

CEO pay vs. median pay

Average pay among CEOs at Ohio’s 54 largest employers that file reports with the SEC was $14.6 million. Of those 54 CEOs, 49 were paid more than $5 million, and 36 made more than $10 million. Only one made less than $1 million, while 11 made more than $20 million, up from seven last year. The highest-paid CEO was Larry Merlo of CVS: Shareholders paid him $36.5 million. The lowest paid CEOs on the list, Berkshire Hathaway’s Warren Buffet ($374,773) and Amazon founder Jeff Bezos ($1.7 million) generate most of their wealth by owning large shares of their respective companies.

Buffet had a net worth of $79 billion,[11] while Bezos this August became the first person to ever amass a wealth of $200 billion,[12] a figure that exceeds the GDP of nearly two thirds of the world’s nations.[13] Figure 1 shows how much CEOs made among the top employers.

Big Ohio CEOs: 306, Median employee: 1

Sixteen of the major employers reported median pay of less than $25,000, which is below the federal poverty level this year for a family of four. Together, these 16 companies employed nearly 165,000 Ohioans at the time of reporting, a figure which may now be significantly reduced by COVID-19.

A majority, 29 of the 54, reported median pay of more than $50,000. Akron utility FirstEnergy reported the highest median worker pay, at $149,550. There, CEO Chuck Jones was paid $14.7 million last year before being fired this October amid allegations connected to the $60 million bribery scandal in which FirstEnergy allegedly paid state legislators to pass the $1.3 billion nuclear bailout, HB6.[14] Figure 2 shows median pay for workers at the companies that reported.

Big Ohio CEOs: 306, Median employee: 1

CEO pay ratios

All but five of the 54 largest reporting Ohio employers paid their CEOs more than 100 times what they paid their typical worker in 2019. Three companies, all retailers, paid their CEOs more than 1,000 times what they paid their typical worker. This figure is down from six companies in 2018 and four in 2017. Thirty-nine CEOs made more than 200 times what the median worker did, and 28 — more than half — made at least 300 times as much. Figure 3 shows ratios of CEO to median worker pay for the past three years.

Big Ohio CEOs: 306, Median employee: 1

The number of CEOs at top Ohio companies paid at least 200 times that of the median worker has increased in the short timeframe since corporations began reporting the figures. In 2019, 72.2% of the reporting employers paid their CEOs at least 200 times as much as their median worker, up from 66% in 2018 and 63.7% in 2017. Firms with a ratio between 200- and 500-to-1 made up the largest single group, with 22 companies. Firms with a ratio between 500- and 1,000-to-1 peaked last year at 26%, after reaching 15.1% in 2018 and 18.2% in 2017. The number of employers with ratios over 1,000-to-1 grew from four to six, then dropped to three, representing 5.6% of Ohio’s biggest companies in 2019.

Corporations increased CEO pay overall last year. Among the 54 reporting companies, 24 posted year-over-year decreases in the CEO pay ratio, while 30 posted gains. Table 1 shows CEO pay, median worker pay, and the pay ratio at each of 54 Ohio employers, ranked by Ohio employment.

Big Ohio CEOs: 306, Median employee: 1

Source: Policy Matters Ohio from Schedule 14(A) company proxy statement filings with SEC. Information contained in the table is all from 2019, except that the employment ranking is from the Ohio Development Services Agency in 2018, and except as otherwise noted. Some CEOs have since left their companies, including Les Wexner of L Brands and Beth Mooney of KeyCorp. *Donigan became CEO of Rite Aid Aug. 12, 2019.

CEO pay has grown faster than economic growth, and faster than the pay of most workers over several decades when median pay growth was close to flat. Nationally, the CEO-median worker ratio was 21-to-1 in 1965 and 61-to-1 in 1989.[15] Today these figures have reached 320-to-1 for the nation and 306-to-1 in Ohio. CEO pay for the U.S. grew 63.4% faster than the S&P 500, and 3.5 times as fast as the average for the highest paid 0.1% of Americans. Realized CEO pay for major companies nationally grew 1,167% from 1978 to 2019. (Realized pay refers to the cash-out value of CEO compensation and is explained below.) Meanwhile, employers increased pay for the median U.S. worker by 15.1%, and in Ohio 3.9% from 1979 to 2019. Company-specific median pay growth is not known, but reported median pay of $52,500 among large Ohio companies in 2019 exceeded the statewide median by about a third.

Ohio’s Fortune 500

CEO-median pay ratios were large but less extreme among the 24 Ohio companies on the Fortune 500 list of the nation’s largest companies. KeyCorp, with a ratio of 152-to-1, was the median, where now-retired CEO Beth Mooney was paid $9.7 million. Ratios for the Ohio Fortune 500 ranged from 56-to-1 at Andersons to 877-to-1 at Marathon Petroleum. Travel Centers of America did not report a CEO-median worker pay ratio as required by the SEC.[16] Table 2 lists the companies. Eight of Ohio’s Fortune 500 are not among the state’s largest employers, marked in green.

Big Ohio CEOs: 306, Median employee: 1

Pay as realized exceeds pay as granted

The figures reported here account for pay “as-granted,” that is, at the time it is received. Because a large share of CEOs’ pay is typically awarded in company shares, the real value of CEO compensation depends on when it is cashed out. Share value can fall, reducing overall CEO pay by the time it is cashed out, but for nine of the 15 Ohio firms analyzed by the Economic Policy Institute, CEO pay “as realized” exceeded pay-as-granted. For the top 350 U.S. firms in 2020, pay-as-realized exceeds pay at the time it’s awarded by an average of 47%. Among Ohio firms in the 350 that EPI analyzed, realized pay boosted earnings 27% and took the average pay ratio from 197-to-1 to 237. The change ranged from a pay reduction of 68% for Cardinal Health CEO, Mike Kauffman (from $15.4 million granted to $4.9 million realized), to a 132% increase for FirstEnergy CEO Charles Jones, from $9.0 million to $20.9 million.

This is important because CEOs have extensive ability to direct corporate policy in ways that can maximize their own compensation by boosting corporate share prices. Corporate strategies targeted to maximizing share price have fallen under criticism for shifting business strategies to short-term visions that can compromise the long-term viability of companies, such as share buybacks. Such buybacks come at a cost to workers and other real investments, and a focus on short-term earnings can weaken the long-term strength of companies, which retirees’ pensions depend on. While we report the more conservative figure of CEO pay as-granted for most of the report, the structure of CEO pay means that executives are generally paid substantially more.

CEOs take small cuts while corporations slash jobs and pay

CGLytics, a corporate governance data analytics provider, surveyed the companies in the Russell 3000 index, which comprises most of the publicly traded businesses in the United States. It found that 554 companies had issued pay adjustments to executives and their board as of May 31, 2020.[17] In total, 634 companies adjusted executive pay this year (80 did so too late to make it into the report), while a majority of the 3,000 have made no adjustments at all. Among the 419 that reduced pay and reported the amount, the median reduction was 40% of base pay. Since CEO pay cuts affected base salary only, not bonuses or shares of company stock, actual reductions were much smaller. Only about 10% of companies that reduced pay reduced total realized compensation by more than 25%.[18] None of the companies had announced reductions to cash bonuses or equity awards that make up most of CEOs’ pay packages. Many of these companies cut workers’ hours or pay.

Abercrombie & Fitch, with the highest CEO pay ratio in Ohio, announced base pay cuts ranging from 10% to 33% for executives at vice president level and upward,[19] but base salary comprised less than 8% of executive pay. Some two weeks before the adjustment, CEO Fran Horowitz was awarded 240,701 shares of restricted stock — three times that of the previous year — before layoffs.[20] Abercrombie, which had 44,000 employees in 2018 including 3,250 in Ohio, furloughed the majority of its in-store workers beginning in April. The company is considering permanently shuttering many flagship stores as some 200 leases are set to expire at the end of the year.[21]

L Brands announced layoffs of 850 workers, including 488 in central Ohio.[22] Cuts include a 15% reduction to its corporate staff in Columbus and worldwide. L Brands founder and CEO Les Wexner received a reported $3.8 million last year before retiring this May, among the lower-paid CEOs on the list.[23]

Starbucks, where CEO Kevin Johnson was paid $19.2 million last year for a ratio of 1,675-to-1, is the subject of a petition demanding that it increase staffing hours to boost morale and enable workers to afford company-sponsored health benefits whose premiums are out of reach; more than 24,000 have signed as of this writing.[24] Starbucks employed 4,400 Ohioans as of its proxy statement filing this January.[25]

Wages, hazard and sick pay

Today as many people’s jobs place them at heightened risk of contracting COVID-19, some companies have fallen short in protecting workers. Enormous and growing CEO compensation shows that firms value their CEOs and sometimes fail to recognize the value of their workforce. While reducing CEO pay on its own would not free enough revenue for needed investment in fair wages, basic worker safety, hazard pay and paid sick time, rethinking shareholder payouts could. Marathon Oil and General Motors are among large Ohio employers that suspended shareholder dividends and have since announced plans to restore them. Shareholders paid Marathon CEO Gary Heminger $24.1 million last year, a rate of 877-to-1. GM in 2019 paid out more than $2.3 billion in shareholder dividends, the same year it shuttered the Lordstown Chevy Cruze plant.[26] [27] Shareholders paid CEO Mary Barra $21.6 million that year.

Hazard pay ends as pandemic worsens

Many of Ohio’s largest employers place workers on the frontlines, where they face high risk of exposure to COVID-19. These include the lowest paid workers on the list. Some companies responded to the pandemic with temporary pay increases or bonuses, or expanded paid sick leave policies. However, many of these large employers that offered hazard pay have already ended those premiums even as the risk to frontline workers is greater than ever.

Amazon paid workers an extra $2 per hour and doubled overtime pay from mid-March to the end of May. Amazon called the payments "incentive pay," not hazard pay. Kroger paid an extra $2 per hour from March to June. Rite Aid paid an extra $2 per hour and ended the policy on May 16. Target extended an extra $2 per hour through July 4th for store and distribution workers, and previously pledged to increase its $13 minimum hourly wage to $15 by the end of 2020. Walmart paid cash bonuses instead of raising hourly wages.

Kroeger paid its essential grocery store workers $2 per hour hazard pay from March to June, but announced that it would not renew hazard pay, which expired ahead of the second coronavirus wave.[28] Kroeger is now being petitioned by UFCW Local 75 to reinstate hazard pay and make pay increases permanent. Unlike some companies, which have had to make layoffs due to the health crisis or recession, Kroger has seen its profits grow, from $653 million to $871 million as of the third quarter.[29] Kroger CEO Rodney McMullin took home $21.1 million last year, for a ratio of 789-to-1. At the same meeting where he announced that frontline workers will not retain their hazard pay, McMullen stated that he will not take a pay cut.

Some retailers refused premium pay for their workers even when it was made available to them at no cost to the firm by the Vermont legislature for employees based in that state.[30] Walmart, Ohio’s second largest employer, and Dollar General, its 44th, both initially refused payments worth as much as $2,000 per worker for their staff, citing concerns that they be perceived as accepting public payouts they thought should go to small businesses. The payments would all go to workers — not to the companies themselves. Both later stated they were reconsidering.

Paid sick time

All of the companies on this list are exempted from the Families First Coronavirus Response Act mandate to provide paid sick leave benefits to their workforce, which exempts employers with more than 500 employees. Most do provide sick leave, though questions have been raised about workers’ ability to use it. Congress should pass subsequent legislation requiring all employers to provide 10 days of paid sick leave, or the part-time equivalent, to any employee diagnosed with COVID-19 or ordered to quarantine by a doctor, public health official, or their employer.[31]

Amazon and Walmart announced expanded paid sick leave policies in response to COVID-19, but in the early weeks of the pandemic, workers reported confusion in claiming it and denials as limited testing availability meant many sent home by their doctors could not prove they had COVID-19.[32] Walmart has previously been criticized for a punitive “absence control program” that punished workers for calling in sick, in some cases when the Americans With Disabilities Act or Family Medical Leave Act affirmed their right to do so.[33] Walmart CEO Doug McMillon was paid $22.1 million last year, a rate 983 times that of Walmart’s median worker.

Despite a stated policy that workers will receive paid time off for “confirmed” COVID-19 cases, a Dollar General employee told Mother Jones that she and colleagues were forced to work while ill in March. She told the magazine that her manager told her to come in or “go home and file for food stamps.” Meanwhile, an analyst in corporate was reportedly fired for raising concerns about worker safety and pay.[34] Dollar General management left employees to make their own hand sanitizer and sent them make-shift masks out of cut-up tee-shirts. The corporation paid CEO Todd Vasos $12 million in 2019, a figure 824 times as large as the median worker’s.

Big disparities in retail pay

Sixteen of the 20 corporations with the largest CEO pay ratios were in the retail sector. All companies that paid their median worker less than $25,000 were among those top 20, meaning these low-pay corporations were also concentrated in the retail sector (13 of 16), along with one restaurant (Starbucks), one theme park (Cedar Point), and one manufacturer (Whirlpool). Nine of these companies paid their median worker less than $15,000. Some note that their median worker is employed part time. However, there is no reason retail employers must offer so few hours and little pay. Doing so is a business decision.[35] Retail drugstore CVS paid its median worker — a full-time staffer — $46,140 including health benefits, while Rite Aid paid $38,394. CVS and some Rite Aid workers are represented by a union. Kroger workers are unionized as well: While their median pay is much lower at $26,000, Kroger workers organized to secure hazard pay and continue to push to make those now-expired premiums permanent.

Abercrombie and Fitch stood out with the highest CEO pay ratio the third year running: CEO Fran Horowitz received $8.4 million, down slightly from the prior year, but a rate of 4,293 times that of the median worker, who was paid $1,954. According to Abercrombie, the worker was a full- or part-time student who worked an average of seven hours a week for six months, implying a pay rate of between $10 and $11 an hour.

Many of Ohio’s largest employers have increased rewards to CEOs as compared with ordinary and frontline workers over the last four decades. The lavish salaries and bonuses corporations give CEOs as they hold down workers’ wages is a major driver of income inequality and the consolidation of power among the wealthiest. Executive pay structures heavily comprised of corporate stock and bonuses have created incentives for short-term profit maximization that can come at the expense of long-term investments in people and company infrastructure. Profitable companies can and should invest in their workers, with fair and robust pay, and policies that protect and dignify the workers who keep their doors open in the midst of the COVID-19 health crisis.

Congress is the body with the most power to reverse enormous pay disparities, but there are steps Ohio, cities and public pension funds can take as well. Policies should both reduce the incentive and ability of companies to pay CEOs so out-of-line with typical workers and, recognizing that these pay scales demonstrate firms’ ability to more deeply invest in workers, should mandate protections for workers against COVID-19, including paid sick time. The Economic Policy Institute recommends using anti-trust enforcement and regulation to limit the market power of large firms: Doing so would promote economic efficiency and competition. Firms’ compensation schemes redistribute wealth to the top. Federal tax policies should be used as a counterbalance. Government procurement policy should give preference to firms with CEO pay ratios under a certain threshold. Pension funds should account for CEO pay in investment decisions. And workers should be protected, with workplace safety mandates and enforcement, paid sick leave requirements, hazard pay, and ultimately a minimum wage that covers the cost of living.

Rein in CEO Pay

  • Fix tax policy at the federal, state and local levels to penalize firms with outsized CEO pay and too little compensation to regular workers, and to restore public revenue for schools, health care, and other important programs.
  • Leverage procurement and subsidy policy to give preference to companies under a certain CEO-median worker pay threshold.
  • Leverage pension funds. Public sector and other union pension funds control billions of dollars that could be leveraged to rein in executive pay and boost wages for working people in profitable firms. Say-On-Pay votes and policies that require CEOs to retain shares over the long term can help protect retirees while reining in excessive CEO pay.

Protect workers

  • Mandate worker safety, paid sick time, hazard pay and a living minimum wage. Congress should start by mandating 10 days paid sick time for large employers, as is required of small and medium-sized companies, and should pass the $12- or $13-per-hour premium hazard pay mandate and funding as proposed this spring.
  • Increase the minimum wage. Large and growing CEO pay rates, along with lavish shareholder dividends, demonstrate that firms can pay people better. Research has shown that employers retain workers and wages go up when the minimum wage is raised.

Fix tax policy

At the federal level, tax policies could include reinstating higher marginal income tax rates at the top and raising corporate tax rates for firms with large pay disparities. A bill introduced by U.S. Senators Bernie Sanders and Elizabeth Warren and Reps. Barbara Lee and Rashida Tlaib — the Tax Excessive Executive Pay Act — would increase federal tax rates on companies whose CEO pay is 50 or more times that of the median worker.[36]

When the Institute for Policy Studies analyzed the potential impact of a graduated federal tax penalty on companies with large pay gaps — ranging from 1% on companies with ratios above 100 to 5% for those above 500 — it found that companies in the S&P 500 stock listings would have paid an additional $17.2 billion in taxes in 2018 if they made no effort to change the CEO-worker pay ratios.[37] Such a policy would serve as a powerful incentive for firms to make their pay scales more equitable, or as a source of public revenue that could help correct such imbalances.

State and local tax policy

Though less far-reaching in scope, state and local governments can also enact tax policies that penalize companies for large pay disparities between regular workers and top executives.

Portland was the first major city to implement a tax penalty for CEO pay rates above 100 times the median, and theirs applies to companies that have contracts with the city. San Francisco voters on Election Day approved the “Overpaid Executive Tax” with the support of 65% of voters. Large businesses[38] with San Francisco offices that pay their CEOs more than 100 times that of their median worker will pay an additional tax of 0.4% to 2.4% of their San Francisco payroll expenses. Others will pay an added 0.1% to 0.6% of their San Francisco gross receipts. The measure is expected to raise between $60 and $140 million per year.

Legislators in eight states have introduced bills to apply a tax penalty or fee to companies with large pay gaps.[39] Over the last 15 years, Ohio lawmakers have gone in the other direction, slashing the top income-tax rate from 7.25% to just 4.797%. Today, Ohio' top 1-percenters pay $40,000 less in taxes than their counterparts did in 2005, while schools and infrastructure go underfunded and the poorest 20% of Ohioans pay more.[40] Ohio policymakers can generate badly-needed revenue for public programs by restoring higher income-tax rates on the highest earners.

State and local purchasing and subsidy policies

The Ohio General Assembly and local governments could adopt procurement policies that would give preference to companies whose highest paid executive receives less than 25 times the median pay level, or some other specific level.

The General Assembly and local governments could also consider disqualifying from state subsidies and grants companies with pay ratios of more than 100. In March, Cleveland City Council approved $100 million in taxpayer subsidies for Sherwin-Williams, which will go toward the construction of a new corporate headquarters.[41] Yet CEO John G. Morikis made 349 times the pay for the company’s median employee last year. Such incentives usually aren’t needed anyway, but when they are used, policymakers should enact restrictions so the public is not subsidizing inequality.[42]

Pension funds

Public pension funds will support income for retirees decades into the future, so fund managers have an interest the long-term viability of companies they invest in. Ohio public pension funds, which hold tens of billions of dollars in stock, could also take steps to combat excessive CEO pay. Under the Dodd-Frank Act, the same legislation that mandated the reporting of CEO pay ratios, shareholders have been able to participate in advisory votes (known as “Say-on-Pay”) on executive compensation since 2011.[43] Advisory votes do not have direct power to set CEO pay. Yet when Say-On-Pay votes fail (meaning advisory voters reject the proposed CEO raise), the companies — which tend to have exceptionally highly paid executives before the failed vote — move toward the industry norm.[44]

As You Sow, a shareholder advocacy nonprofit which tracks shareholder votes on CEO pay, found that 15 pension funds voted in 2019 against more than half of the CEO pay raises proposed for the 100 most over-paid CEOs based on Total Shareholder Return.[45] The Minnesota State Board of Investment led the list of U.S.-based pension funds most likely to check excessive CEO pay, with a 77% record of opposing raises for As You Sow’s most overpaid. California’s CalPERS supports rules requiring CEOs to hold stock for at least six years before divesting, and then reduce holdings by no more than 20% per year, a policy designed to better align CEOs interest with retirees’ interest in the long-term strength of the company, which can depend crucially on staffing and retaining a skilled and well-paid workforce.

The Ohio Public Employees Retirement System (OPERS), which controls $92 billion in funds, voted against CEO pay for overpaid 100 CEOs 51% of the time last year, up from 44% the previous year. The Ohio School Employees fund, with $14 billion, did so 45% of the time. OPERS indicates in its proxy voting guidelines that CEO salary should be performance benchmarked, and that the fund will generally vote against the Lead Independent Director when the board fails to take actions to protect shareholders’ long-term interests.[46] OPERS should also explicitly add the CEO pay ratio to the criteria they use in their Say-On-Pay analysis, adopt limits for what is considered reasonable, and vote against the pay plan of any company that does not meet them.

Protect workers with a fair minimum wage, hazard and sick pay

All of the corporations on this list are exempted from the Families First Coronavirus Response Act mandate to provide paid sick leave benefits to their workforce, which excluded employers of over 500 staff. When low-paid workers are forced to choose between staying home to recuperate from illness or receiving a paycheck, it puts them, their coworkers, and the public at risk. Congress should pass subsequent legislation requiring all employers to provide 10 days of paid sick leave, or the part-time equivalent, to any employee diagnosed with COVID-19 or ordered to quarantine by a doctor, public health official, or their employer, or any employee who serves as the primary caregiver for a person diagnosed. Further legislation should require all employers to enable workers to earn paid sick time for use for any illness.

Frontline workers should be paid a premium for work that puts them at heightened risk of COVID-19 exposure. But while many large employers offered premium pay or bonuses beginning in the spring, companies have now generally ended those policies, even as COVID-19 cases continue to surge. Congressional efforts to pass hazard pay were made in April, when House Democrats passed the CARES Act with a provision for $13 per hour federal premium pay on top of base wages for frontline essential workers, and May, when Sen. Mitt Romney proposed a separate $12 plan with the federal government picking up 75%. The Senate removed hazard pay when they passed the CARES Act.

Make higher wages permanent

The Brookings Institute has called hazard pay a “down payment on what should be permanent, lasting change through an increased minimum wage.”[47] All of the companies featured in this report are among the most profitable in the world. Yet 30% of Ohio’s largest reporting employers paid their median worker less than $25,000 per year. That’s less than the poverty level for a family of four.[48] Congress should pass a $15 minimum wage, equivalent to $31,200 per year for full-time work. Until it does so, Ohio should pass its own. Policy Matters Ohio found that a $15 minimum wage, effective by 2023, would benefit some 2 million working Ohioans.[49]


Excessive CEO pay compared to their employees is a key driver of wealth and power inequality. Along with large payouts for shareholders, it shows a commitment among large Ohio employers to put executives and shareholders first, ahead of the working people who make companies successful. Some large Ohio employers have increased profits during the crisis and asked people working on the frontline to take on new risks without enough protection. Others have been forced to make cuts, and have foisted much of the cost on regular workers laid off while executives take relatively small cuts or none at all. It’s time to rein in CEO pay and require profitable companies to value the working people on whom their success depends.

[1] Gunjan Banerji, “Why Did Stock Markets Rebound From Covid in Record Time? Here Are Five Reasons,” Wall Street Journal, September 15, 2020,
[2] From 2009-2012. See Estelle Sommeiller and Mark Price, “The Increasingly Unequal States of America: Income Inequality by State, 1917 to 2012,” Economic Policy Institute, January 26, 2015,
[3] Michael Shields, April Hopcroft and Siyang Liu, “State of Working Ohio 2020: Reset and Unrig,” Policy Matters Ohio, September 4, 2020,, see Chart 1.
[4] Lawrence Mishel and Jori Kandra, “CEO compensation surged 14% in 2019 to $21.3 million,” The Economic Policy Institute, August 18, 2020,
[5] Note that the “median worker” is firm specific and self-reported in company proxy statements to the SEC. The “median CEO” is the one whose pay ratio falls in the middle among all reporting companies. We report this figure as generally representative of the group, but because reporting requirements are not strictly standardized, we do not list firms by rank order.
[6]Rosanna Landis Weaver, “The 100 most overpaid CEOs: Are fund managers asleep at the wheel?” As You Sow, February 2020, Total Shareholder Return is the dividends plus increase in the price of the stock since the time of purchase. It is divided by the purchase price and reported as a percentage gain. Mathematically: TSR = { (current price - purchase price) + dividends } ÷ purchase price. See Akhilesh Ganti, “Total Shareholder Return,” Investopedia, March 16, 2020,
[7] Ohio Development Services Agency, “Ohio Major Employers Section 1,” May 2019, at
[8] Fortune, “Fortune 500 companies list,”, accessed November 11, 2020.
[9] Forbes, “Cleveland-Cliffs Decides To Buy AK Steel: Who Is The Real Winner?” January 17, 2020,
[10] PR Newswire, “Cincinnati Bell Inc. To Be Acquired By Macquarie Infrastructure Partners In $2.9 Billion Transaction,” March 13, 2020,
[11] Forbes real time net worth,, November 9, 2020.
[12] Jonathan Ponciano, “Jeff Bezos Becomes The First Person Ever Worth $200 Billion,” Forbes, August 26, 2020,
[13] GDP (Current USD$), World Bank national accounts data, and OECD National Accounts data files,
[14] “FirstEnergy CEO Chuck Jones fired amid HB6 corruption: This Week in the CLE,”, October 30, 2020,
[15] Lawrence Mishel and Jori Kandra, “CEO compensation surged 14% in 2019 to $21.3 million.,” The Economic Policy Institute, August 18, 2020,
[16] TravelCenters of America did not respond to calls from Policy Matters Ohio asking why they failed to report their CEO-median pay ratio.
[17] CGLytics, “The Pandemic and Executive Pay,”,, retrieved December 1, 2020.
[18] Peter Eavis, “As the Pandemic Forced Layoffs, C.E.O.s Gave Up Little,” The New York Times, July 29, 2020,
[19] Tristan Navera, “Abercrombie latest Central Ohio company to furlough workers, cut executive pay,” Columbus Business First, updated April 7, 2020,
[20] Executive Paywatch, AFL-CIO,, accessed November 12, 2020.
[22] Mark Williams, “L Brands job cuts hit Columbus, Reynoldsburg especially hard,” August 3, 2020,
[23] Mark Williams, “Leslie Wexner steps down as chairman and CEO of L Brands,” The Columbus Dispatch, updated May 19, 2020,
[24] Jaime Prater, “Starbucks, Lack of Labor is Killing Morale,”,, accessed November 12, 2020.
[25] Starbucks Corporation, Definitive Proxy Statement Schedule 14A, January 24, 2020,
[26] Thomas Gryta, “Coronavirus Spurred Companies to Hoard Cash. Now They Are Starting to Dole It Out.” The Wall Street Journal, November 22, 2020,
[27] Michael Shields, “Smart policy could have saved Lordstown,” Policy Matters Ohio, March 13, 2019,
[28] Dan Monk, “Kroger CEO: No more hazard pay for grocery workers,” WCPO, June 25, 2020,
[29] Jayson Derrick, “Kroger Falls After Missing Revenue In Q3, Online Sales Growth Slows,” Yahoo Finance, December 3, 2020,
[30] Michael Corkery and Sapna Maheshwari, “Virus Cases Rise, but Hazard Pay for Retail Workers Doesn’t,” The New York Times, updated November 23, 2020,
[31]Michael Shields, “Keeping Ohioans safe from COVID-19 at work,” Policy Matters Ohio, August 28, 2020
[32] Olga Khazan, “Amazon Is Struggling to Pay Workers in Quarantine,” The Atlantic, March 26, 2020,
[33] Dina Bakst, Elizabeth Gedmark and Cara Suvall, “Pointing Out: How Walmart Unlawfully Punishes Workers for Medical Absences,” A Better Balance, July 2017,
[34]David Rosenberg, “A Dollar General Analyst Complained About Store Workers Getting Screwed. He Got Fired,” Mother Jones, May 24, 2020,
[35] While some workers prefer part-time work, many accept it because it is the only work available to them.
[36] H.R.5066 - Tax Excessive CEO Pay Act of 2019
[37] Sarah Anderson and Sam Pizzigatti, “Executive Excess 2019,” September 2019,
[38] The policy will apply to businesses with over $1 billion in gross receipts, 1,000 employees nationwide, and administrative offices in San Francisco. The percentage of the tax is graduated based on the CEO pay ratio.
[39], “State legislative proposals related to CEO-worker pay ratios, CEO-Worker pay resource guide,”, accessed November 11, 2010.
[40] Wendy Patton, “Rebalance the income tax to build a better Ohio for everyone,” Policy Matters Ohio, October 15, 2020,
[41] Robert Higgs, “Cleveland City Council approves tax incentives to help Sherwin-Williams build its new headquarters,”, July 17, 2020
[42] Schiller, Zach, “With revenue about to plunge, Cleveland council should delay vote on Sherwin-Williams incentive package,” Policy Matters Ohio, March 23, 2020, at
[43] Securities & Exchange Commission, “SEC Adopts Rules for Say-on-Pay and Golden Parachute Compensation as Required Under Dodd-Frank Act,” at
[44] Ran Bi, “CEO Pay Mix Changes Following Say on Pay Failures,” Harvard Law School Forum on Corporate Governance, February 23, 2019,
[45] Rosanna Landis Weaver, “The 100 most overpaid CEOs: Are fund managers asleep at the wheel?” As You Sow, February 2020,
[46] Ohio Public Employees’ Retirement System, “Corporate Governance POLICY & PROXY VOTING GUIDELINES,” October 2020,
[47] Molly Kinder, Laura Stateler and Julia Du, “The COVID-19 hazard continues, but the hazard pay does not: Why America’s essential workers need a raise,” The Brookings Institute, October 29, 2020,
[49] Michael Shields, “$15 minimum wage would help 2 million Ohioans,” Policy Matters Ohio, February 12, 2019,” Many workers who would have benefitted from this policy have been laid off due to COVID-19. The recession has caused job losses concentrated among low-wage workers.


2020CEO payMichael ShieldsWork & Wages

Share This


Photo Gallery

1 of 22

To receive updates and stay connected to Policy Matters Ohio, sign up here!


No Thanks, Please don't ask again.