slides: The Highest Paid CEOs in Massachusetts

Tuesday, April 21, 2015

GoLocalWorcester News Team

The average Chief Executive Officer made 97 times the average worker's salary in Massachusetts in 2013, according to a study, “Executive Paywatch: High Paid CEOs and the Low Wage Economy,” published by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).

According to the Bureau of Labor Statistics’ data for production and nonsupervisory workers, the average worker in Massachusetts made $49,910 a year in 2013, while the average CEO in Massachusetts, according to the AFL-CIO, was paid $4,848,781.

Nationally, the CEO to worker pay ratio in 2013 was 331 to 1, and the CEO to minimum wage worker ratio was 771 to 1.

“Runaway CEO pay is fueling economic inequality, a dangerous trend that undermines the goal of raising wages for all,” Anthony DeAngelo, press secretary for the AFL-CIO, told GoLocalWorcester in a statement. “CEO pay has increased dramatically at the same time that worker pay has stagnated due to policy choices that favor the 1 percent over working people.”

Mike Stenhouse, head of the Rhode Island based think tank Center for Freedom and Prosperity disagrees. "In a depressed economy, wage disparities tend to increase,” Stenhouse told GoLocalWorcester. “With lower numbers of middle-class jobs, the average income for all will go down, increasing the disparity. The compensation of CEOs or anyone else in the free-market should be of absolutely no concern to taxpayers."

SEE THE LIST OF THE HIGHEST PAID CEOs IN MASSACHUSETTS IN THE SLIDESHOW BELOW.

Massachusetts has 6 CEOs on the AFL-CIO’s Top 100 CEO Pay list - including Endurance International Group Holdings, Inc’s Hari Ravichandran, who had a total compensation of $52,518,620 in 2013.

Ravichandran received a total compensation of $52,518,620 in 2013, which includes a base salary of $485,460, stock awards worth $12,160,104, option awards worth $18,776,813, “Non-Equity Incentive Plan Compensation” worth $8,501,412, Change in Pension Value and Deferred Compensation Earnings of $8,467,509, and other benefits worth $20,608,743. At that rate, Merlo earned 1490 times the average American worker’s pay, calculated by the Bureau of Labor Statistics at $35,239.

Trip Advisor's Stephen Kaufer received a total compensation of $39,014,227 in 2013, which includes a base salary of $500,000, a bonus of $450,000, option awards worth $38,054,126, and other benefits worth $10,101. At that rate, Kaufer earns 1107 times the average American worker’s pay.

The CEO of Hologic Inc, Stephen P. Macmillan, is the next highest paid CEO in Massachusetts, with earnings of $24,458,289 or 694 times the average American worker’s pay, followed by Boston Properties Inc’s CEO Mortimer B. Zuckerman, who earned $23,821,829, which is 676 times the average pay.

In 2013, CEOs of the Standard & Poor’s (S&P) 500 Index companies received, on average, $11.7 million in total compensation, according to the AFL-CIO.

“Today’s ratio of CEO-to-worker pay is simply unconscionable,” states the AFL-CIO report. “While CEO pay remains in the stratosphere, production and nonsupervisory workers took home only $35,239 on average in 2013, and a full-time worker making the federal minimum wage earned only $15,080.”

"The question of CEO compensation is nothing more than a manufactured class-envy controversy by those who want to dismantle the free-enterprise system,” counters Stenhouse. “Any state regulations in this area would be misguided, and would further make our state less likely to maintain and attract the big corporations that we so desperately need to headquarter here."

It is important to note that the AFL-CIO’s CEO-to-worker comparison isn’t exact. The AFL-CIO’s CEO compensation includes stock and option awards, and other income sources, while the measure for workers just includes pay, and does not include pension or 401(k) plan contributions from the employer. According to the Wall Street Journal, AFL-CIO officials said there is an absence of data showing what individual employers pay their employees, so information from the Bureau of Labor Statistics is used that is based on workers’ salaries.

Minimum Wage

According to the AFL-CIO report, 49.6% of workers making at or below the minimum wage are age 25 or older. The federal minimum wage is $7.25 an hour, while the Massachusetts minimum wage is $9.00 an hour.

The AFL-CIO supports raising the federal minimum wage to $10.10 an hour.

“Raising the minimum wage is a critical and simple way to help repair the underlying weakness in our economy. It would boost consumer spending and increase the purchasing power of millions of low-wage workers, especially in states with the highest percentages of low-wage workers—many of which also have the highest rates of poverty,” stated DeAngelo.

“In brief, the minimum wage is a price control placed on labor by the government,” counters Paul Guppy, Vice President for Research at the Washington Policy Center. “I wouldn’t say it “hurts” business; it only forces business owners to adjust to new conditions imposed by the government. Business owners have several ways to adjust: raise prices, lay-off workers, reduce hours, use more automation, shift some operations or future growth to a jurisdiction with a more flexible wage law. Those who are really hurt are young workers and low-skill workers whose labor may not be worth the mandated minimum. A worker may be willing to work, and an employer willing to hire, but a third party, government, intervenes and says this voluntary agreement is illegal above a certain price point. The mandated labor price may not pencil out for the employer, and the job disappears. Alternatively, the agreement continues as a black market job, outside the law.”

slides: The Highest Paid CEOs in Massachusetts

SEE THE LIST OF THE HIGHEST PAID CEOs IN MASSACHUSETTS IN THE SLIDESHOW BELOW.

Related Slideshow: Massachusetts’ 50 Highest Paid CEOs

#50

Nigel Travis

#49

Michael R. Minogue

#48

Michael A. Bradley

#47

P. James Debney

#46

Peter R. Chase

#45

Scott A. Buckhout

#44

Michael K. Simon

#43

Louis Hernandez, Jr.

#42

Linda K. Zecher

#41

Frederick H. Eppinger

#40

Josef H. Von Rickenbach

#39

David Aldrich

#38

Harvey J. Berger, M.D.

#37

Brian Concannon

#36

Vincent T. Roche

#35

Mark S. Casady

#34

John M. Maraganore, Ph.D.

#33

Patrick M. Prevost

#32

James Heppelmann

#31

Robert F. Friel

#30

Michael Bonney

#29

Marc Beer

#28

James C. Foster

#27

Alan J. Herrick

#26

Michael G. Kauffman, M.D., Ph.D.

#25

F. Thomson Leighton

#24

Thomas J. May

#23

Jonathan Bush

#22

Leo Berlinghieri

#21

Harlan F. Weisman, M.D.

#20

Ron Zwanziger

#19

Christopher Garabedian

#18

William L. Meaney

#17

Ronald L. Sargent

#16

Michael F. Mahoney

#15

James D. Taiclet, Jr.

#14

Joseph M. Tucci

#13

Jeffrey M. Leiden

#12