Big numbers can be hard to wrap your head around, so I thought this bar chart might put into perspective the average CEO pay compared to the median US income. Keep in mind “median” means the 50th percentile mark. That means HALF of Americans make LESS than that. 50%. Wild.

One way to look at CEO pay is the “CEO to typical worker” ratio. i.e. how much more does a CEO make than their average worker. Back in 1965 that ratio was 20-1. Not bad! The leader of the company makes as 20 times as much as one of their workers. In 1989 that number had climbed to 59-1. Really getting up there. In 2021 (most recent data) that ratio is now 399-1.

My high school graduating class was 200. That’s kind of like everyone of them working for me, but I make twice as much as all of them combined. If I made $100,000/month that would leave $250/month for each of them. For the one kid that sucker punched me in the nose when I was 10, I’d be fine with that, but the rest of them I think they deserve better.

Another crazy thing to think about is that this is just INCOME, not WEALTH. Generally, if you’re making $33K/year, you’re pretty much spending every penny just to get by. That doesn’t leave much breathing room for wealth creation. If you’re making $28M/year, you could probably tighten that belt and squeak by on spending $20M/year which leaves you a cool $8M for saving and investing.

What should we do with all this information? I don’t know, but it would be nice if we could raise up that median pay to make it easier on most of us. But that dream isn’t trending well, so in the meantime make sure to focus on what YOU can do to improve your situation. Make more, spend less, invest the difference.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy

Thanks to @jessandbaby for the idea inspiration!