This CEO Made 300 Times More Than His Workers

By Douglas A. McIntyre Published Apr 6, 8:10AM EDT

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This CEO Made 300 Times More Than His Workers — © josefkubes / Shutterstock.com

The U.S. Securities and Exchange Commission has long required that public companies post the annual compensation of their top executives in their proxies. In 2015, the SEC ruled that public corporations had to show how much their CEOs made in relationship with the median salary of their firm’s workers. The rule went into effect in 2017. The decision was part of the larger Dodd-Frank Act, which Congress passed as a sweeping reform of the federal’s governments financial regulations.

Using artificial intelligence and machine learning, MyLogIQ provides information about public companies. The firm has provided data exclusively to 24/7 Wall St. that covers CEO pay ratios from 294 public companies that have released their 2020 proxies. CEO compensation included salary, bonuses, stock awards, stock options, long-term incentives, short-term incentives and changes in pension values, all of which are required to be broken out by SEC rules.

The person who had the highest ratio of pay to the median compensation of his company’s employees was Michael F. Roman, the board chair and chief executive officer of 3M. His ratio was an extraordinary 308 to 1. In the 3M proxy, the company reported, “[W]e selected the median employee from among 96,902 full-time, part-time, temporary and seasonal workers who were employed as of December 31, 2020.”

3M was only modestly successful in 2020. Revenue was up 1% to $32.2 billion. Earnings rose to $9.32 per share from $7.92 in 2019. Investors had a brutal year, however. 3M shares dropped 2% in 2020, against the S&P 500’s 18% gain for the year. 3M also has underperformed the market over the past two-year and five-year periods. Roman became CEO in July 2018.
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Roman has been criticized recently for 3M’s 2021 guidance, which was judged by many to be poor. Revenue growth is expected to be up 5% to 8%. Earnings per share are expected to be in the range of $9.20 to $9.70.

Both investors and employees have reason to be upset about Roman’s 2020 compensation.

Special thanks to MyLogIQ.

Click here to see America’s five worst-run companies of 2020.
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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.