This is the first of our three-part series on employee compensation across top tech, media and telecom companies. The second installment can be found here.
Highly-paid CEOs get a lot of attention, but for the rest of us, it is the companies that are paying employees the most that we really want to know about.
Among the top 20 U.S. publicly traded telecommunications firms by market capitalization, Verizon Communications Inc. took the No. 1 spot in terms of highest median employee pay, reporting a median employee salary of $172,971. With Verizon CEO Hans Vestberg earning a total compensation package worth $18.1 million, this gave the company a ratio of CEO to median employee compensation of 105x.
The CEO pay ratio dates back to 2018, when U.S. companies began disclosing the compensation of what they identified as a "median" employee and telling investors how that stacks up to the top executive's pay. Notably, differing employee demographics, such as the location of the workforce and the role a company chooses for its median employee, make like-for-like pay ratio comparisons between companies difficult.
In Verizon's case, the company included a change in pension value during the year, which resulted in an increase of $53,098 for the median employee compensation. The increase was largely driven by a significant decrease in the interest rates year over year used to measure the pension benefit.
Excluding the change in pension value from the median employee's 2019 annual total compensation, the median employee's pay would have been $119,873 and Verizon's CEO-to-median-employee pay ratio would have been 151x.
Among the top 20 U.S. telecommunications firms by market capitalization, the company with the highest CEO pay ratio was T-Mobile US Inc., which reported a ratio of 446x and a median employee salary of $62,195. John Legere, who stepped down as T-Mobile CEO earlier this year after leading the company through its merger with sprint, earned a total compensation package in 2019 valued at $27.8 million.
While T-Mobile median employee salary looks far smaller than that of its wireless competitor, Verizon, the companies utilized two different methodologies for calculating the value. Verizon annualized the compensation for employees who were not employed for the entire 12-month period, not including temporary and seasonal employees. T-Mobile, by contrast, said in its proxy statement that it did not annualize the compensation for any employees, noting its "large part-time, retail and customer service employee population."
The companies with the smallest CEO pay ratio among the analyzed firms were the mobile internet services company Boingo Wireless Inc. and the healthcare communications company Spok Holdings Inc. Both firms reported CEO pay ratios of 22x. Both companies reported six-figure median employee salaries, with Boingo reporting a median employee salary of $117,076 and Spok reporting $101,869.
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