Can you guess how much the average CEO makes?
A new survey asked workers to answer this question, and most of them were way off.
How much do you think the average CEO makes? A few million? Or a few dozen million? If you’re anything like most Americans, you’re probably guessing far under the mark, a new study says—finding that the majority of workers think CEOs make $1 million annually. The actual figure is about 10 times that.
Stanford University’s Rock School for Corporate Governance surveyed 1,500 workers nationwide about how they perceive executive compensation. The workers’ responses were separated out based on annual household income as follows: less than $20,000, between $50,000 and $60,000 and over $150,000. The chief commonality? Each group significantly undershot the actual median salary of CEOs at Fortune 500 companies, which is currently around $10.3 million.
Just how far off they were varied based on household income, with lower income respondents guessing CEOs made around $500,000 a year, while those who made $150,000 or more believed CEOs earned a paycheck of around $5 million.
Nevertheless, the general sentiment among workers is that even their best guesses at CEO salaries are too high—to say nothing of the actual salaries—with 74% saying they believed CEOs aren’t paid correctly in comparison to the average worker.
“While we find that members of the public are not particularly knowledgeable about how much CEOs actually make in annual pay, there is a general sense of outrage fueled in part by the political environment,” Professor David F. Larcker, an author of the study, said in a statement.
Executive pay has been a controversial subject lately, prompting some top earners—like Facebook founder Mark Zuckerberg and former Twitter CEO Jack Dorsey—to take minimal salaries or none at all. According to the American Federation of Labor and Congress of Industrial Organizations, the highest paid CEO is Discovery Communications’ David M. Zaslav, who makes just over $156 million annually. The tobacco industry, meanwhile, was identified as having the highest CEO pay by field—around $13 million.
The majority of the Stanford survey’s participants felt that CEOs should have their salaries capped (62%) regardless of how their company performs, with most stating that their pay shouldn’t exceed six times that of the average worker (it’s currently around 210 times higher). “In many parts of the country, it is incomprehensible that anyone can earn this much money,” said Larcker. “It is understandable that any limit on CEO pay would be low for most citizens.”
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