CEO pay ratios in Minnesota: What the latest data show

Target CEO makes 775 times what the average worker earns

By: - January 10, 2023 6:00 am

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CEOs at Minnesota’s biggest public companies — including Target, Best Buy and 3M — continue to earn hundreds of times more than their employees, according to pay ratio data filed with the Securities and Exchange Commission.

As in 2020, when the Reformer last analyzed these figures, retailer Target shows the largest pay disparity, with CEO Brian Cornell’s annual compensation of $19.8 million roughly 775 times his average employee’s annual pay. That means Cornell makes as much in just half a workday as his typical employee earns in an entire year. 

The gap is somewhat smaller at Best Buy, where CEO Corie Barry earns 521 times the median worker’s pay. UnitedHealth CEO Andrew Witty earns about 300 times as much as his typical employee, while the CEOs of 3M and US Bancorp make between 225 and 250 times the company median.

Across all S&P 500 companies in the U.S. the executive pay ratio was 324-to-1 in fiscal year 2021, according to a previous analysis by the AFL-CIO. The ratio is somewhat smaller among Minnesota’s 16 Fortune 500 companies, averaging about 263-to-1. That figure hasn’t changed much since 2019. Minnesota’s Target Corp. is the only company that cracks the top 20 pay ratios nationwide.

Economists have long pointed to ballooning CEO compensation as a driver of the runaway inequality that’s characterized the American labor market since the 1980s.

“Exorbitant CEO pay is a contributor to rising inequality that we could restrain without doing any damage to the wider economy,” Josh Bivens and Jori Kandra of the Economic Policy Institute recently recently wrote. “CEOs are getting ever-higher pay over time because of their power to set pay and because so much of their pay (more than 80%) is stock-related.” 

Research has generally shown little correlation between CEO pay and company performance measured across a variety of metrics, with some studies showing the highest paid CEOs actually perform the worst.

Caveats abound with this data, which the SEC requires publicly traded companies to report each year. Firms are given some leeway in how they calculate their ratios, with differing methodologies leading to difficulties comparing companies on an apples-to-apples basis. Some companies have high percentages of workers overseas, which can skew ratios, while still others rely more on part-time or seasonal labor forces. That’s especially true of retail companies like Target and Best Buy, where ratios reflect relatively large numbers of part-time workers. 

Pay ratios like these didn’t used to be common. In the 1970s and 1980s, the average CEO-to-worker pay ratio was well under 100 nationwide, according to the EPI analysis. But CEO compensation took off in the 1990s, peaking in the year 2000 and fluctuating between 200 and 400 times the average worker in the two decades since.

“There has been very little growth in the compensation of a typical worker since the late 1970s: It has grown just 18.1% over the 43 years from 1978 to 2021, despite a corresponding growth of net economywide productivity of 61.8%,” EPI’s Bivens and Kandra write. 

Over the same period, however, executive compensation ballooned by 1,460%.

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Christopher Ingraham
Christopher Ingraham

Christopher Ingraham covers greater Minnesota and reports on data-driven stories across the state. He's the author of the book "If You Lived Here You'd Be Home By Now," about his family's journey from the Baltimore suburbs to rural northwest Minnesota. He was previously a data reporter for the Washington Post.