Mattel: 4,028:1. Apple: 650:1. Alphabet: 32:1. Tesla: 0:1. Those four figures sit inside the same disclosure regime, which is why the CEO pay ratio produces so many hot takes and so little clarity.
In our analysis of SEC filings for 123 public companies with usable latest pay-ratio data, the median ratio is 154:1. That is already a large gap. But the spread is so wide that the number is better used as a prompt for questions than as a final verdict.
The biggest misconception is simple: a high ratio does not automatically mean exploitation. It often reflects workforce mix. A company with a large hourly or global workforce will usually report a much lower median employee pay figure than a company built around highly paid technical or professional labor, even before you get to the CEO package.
Key Takeaways
- 154:1 is the median across the 123 companies we track, not the full S&P 500.
- Mattel at 4,028:1 is the extreme case in this set.
- Alphabet at 32:1 shows how a highly paid workforce can compress the gap.
- Tesla at 0:1 shows how disclosure timing can make a ratio look bizarre without changing economic reality.
Highest Ratios in the Companies We Track
- Mattel: 4,028:1
- Charter: 1,635:1
- MercadoLibre: 1,589:1
- Western Digital: 1,321:1
- FirstCash: 1,041:1
That top-five list matters because it makes the disclosure feel less abstract. There is a real difference between a ratio that lands around the middle of our set and one that clears 1,000:1. But even here, the number is still a blend of CEO pay, worker pay, and business model.
Why the ratio swings so much
Compare a few current names side by side:
- Apple: 650:1, with CEO pay of $74.6 million and median employee pay of $114,738.
- Alphabet: 32:1, with CEO pay of $10.7 million and median employee pay of $331,894.
- Costco: 192:1, with CEO pay of $18.7 million and median employee pay of $64,318.
- Nvidia: 94:1, with median employee pay of $228,078.
Apple and Alphabet are both giant technology companies, yet one reports 650:1 and the other 32:1. That difference does not mean Apple is twenty times more exploitative. It means Apple reported a much bigger CEO pay number for the year, while Alphabet reported a much higher median worker number.
What the ratio actually measures
The formula is simple:
- CEO pay: the company's disclosed annual pay figure for the top executive.
- Median employee pay: the worker right in the middle of the pay distribution.
- The ratio: the distance between those two numbers.
That means the ratio answers one narrow question well: how far apart are those two disclosed pay figures? It does not tell you by itself whether the package was deserved, whether workers are well paid, or whether shareholders got a fair deal.
Why low ratios can mislead too
A low ratio does not automatically mean the company is unusually fair. Sometimes it means the workforce is highly paid. Sometimes it means the CEO had a quiet grant year. Sometimes it means both.
Alphabet is the cleanest workforce example. A ratio of 32:1 looks tame until you notice the median employee figure of $331,894. Tesla is the cleanest disclosure-timing example. A ratio of 0:1 does not mean Elon Musk suddenly earned what a typical Tesla worker earned. It means the reported CEO pay figure for that year was $0.
What the ratio hides
This is where readers usually go wrong. The ratio is real, but it is incomplete.
- Methodology matters. Companies have flexibility in how they identify the median employee.
- Stock awards matter. One large grant can make one year look far more dramatic than the year before it.
- Performance still matters. A wide gap can coexist with strong value creation or weak results. The ratio alone cannot tell you which.
- Governance still matters. The board, not the ratio, decides the package.
That is why the ratio works best when paired with broader context. If you want to know whether the package was deserved, you need the company's stock performance, the board's compensation logic, and the executive pay breakdown itself. Our pay-for-performance article exists precisely because the ratio alone cannot answer that question.
How to use the ratio without fooling yourself
- Compare the same company over time. If the ratio jumps, ask what moved: a new grant, a workforce shift, or a restructuring.
- Compare real peers. Costco versus Walmart or Apple versus Alphabet is more meaningful than Apple versus Marriott.
- Read it with governance. Put the ratio next to board incentives, insider activity, and executive pay structure before drawing conclusions.
The right workflow is simple: start with the ratio, then go deeper. Search the company on rentseek.ing, open the ticker page, compare the peer set, and then read the supporting context on pay mix and performance. If you stop at the ratio itself, you stop too early.
Why this does not conflict with broader market studies
If you have seen figures like AFL-CIO's 272:1 S&P 500 average or Equilar's 288:1 median, that does not contradict the 154:1 figure here. Those are broader market studies. Our figure is the median across the 123 companies we track with usable latest filings. Different sample, different answer.
Bottom line: use the ratio to identify the filings worth reading, not to skip the reading. The number is strongest when you pair it with workforce mix, stock-award timing, and board decisions.
Which ratios actually deserve attention?
We track the ratio, the pay figure behind it, and the governance context around it. Each week we send the filings where the headline number hides a more interesting story.