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CEO Pay: Earning In 2 Days An Average Worker’s Yearly Salary

In a world where the gap between the rich and the poor has been widening, CEO pay has been a matter of debate.

The date of 4 January is marked as the day when CEOs of Britain's largest companies already earn what it takes an average worker to make in a year. But British CEOs are not the only ones who out-earn their workers so quickly. An analysis of the wage difference between CEOs and workers in 22 countries by the financial and media company Bloomberg shows that top executives in the United States and India, the two largest democracies in the world, can get the average worker's yearly wage even quicker,

according to report on BBC.com

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The Global CEO Index analyzes how much more money executives make than someone on the average annual wage. In the United States, the data suggests that top CEOs need less than two days (1.52) to overtake a worker's yearly income.

In India, it takes even less time. An average Indian CEO earns more in about a third of a day (0.35) than his average worker would in 365 days.

Is the huge gap justified? The opinion is divided.

In an article published in the Harvard Business School website earlier last year, Ethan Rouen, an assistant professor of business administration, flagged that inequities need to be explained to the public and workers.

"When you hear the amount that a CEO makes, it is going to seem outrageous. People are going to react with passion," Rouen said. "So, it's going to fall on every company that has to disclose these figures to provide some explanation and give a measured response justifying the pay disparity."

He also cited a 2014 survey in which people polled in several countries declared that CEOs shouldn't earn more than four times what the average worker makes. Rouen, however, argues that the gaping wage gap should be considered in a wider context than simply comparing average figures.

He gave Apple as a primary example. The company, which is estimated to pay its CEO, Tim Cook, over 250 times the average worker's annual salary in the US. The gap can differ in comparison to other tech firms because Apple employs a lot of people in the retail sector, where wages are historically lower.

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