The wage gap between company chief executives and employees is becoming a hot-button topic, with the huge disparity continuing to widen.

The salary structures in the United States and Korea show different reward systems for CEOs.

At the same time, there has been a heated debate in the U.S. in recent years whether the astronomical remuneration paid to CEOs is appropriate.

A CNN article published in August reported that Wal-Mart CEO Doug McMillon received $19.4 million in rewards last year, while the lowest-paid workers at the retail giant earned $9 an hour.

“Something is terribly wrong here,” the article read, pointing out that McMillon makes over 800 times more than his employees even after Wal-Mart’s minimum wage increase this year.

The United States has a performance-based system where people are paid salaries based on their achievements, but this has become controversial, as the wage gap is widening immensely.

According to an Economic Policy Institute report last year, 50 years ago, an average American CEO received about 20 times more than the employees, but in 2013 it rose to 300 times more on average. The trend has become stronger since the global financial crisis of 2008, after CEOs asked for more benefits for pulling companies through the economic crisis.

Media reports confirmed that the American wage gap is highly imbalanced.

According to USA Today, Discovery Communications CEO David Zaslav received $156 million as remuneration last year, 2,282 times more than his employees -- earning average wage of $68,397 -- while Chipotle Mexican Grill Inc. CEO Steve Ells also received 1,524 times more than his employees. Starbucks chairman and CEO Howard Schultz got 994 times more.

Other media reports show a similar trend. Payscale reported that CVS Health president and CEO Larry J. Merlo received $12.11 million, 422 times more than the average employee.

Additionally, Goodyear Tire & Rubber Company chairman, CEO and president Richard J. Kramer’s remuneration was $15.08 million, 323 times more than the average employee at the tire-maker -- $46,700. Walt Disney CEO Robert Iger received $17.03 million, 282 times that of his employees on average.




The huge wage gap led to the U.S. Securities and Exchange Commission adopting a rule requiring Pay Ratio disclosure, meaning companies will be required to reveal the ratio between the CEO’s salary and the median wage of the company’s employees, to take effect after the 2017 fiscal year. The decision has also drawn controversy, and corporations and the U.S. Chamber of Commerce & Industry have been attempting to retract the decision.

South Korea has also been releasing information on CEO earnings since last fiscal year. The Financial Supervisory Service’s online disclosure showed that a majority of Korean CEOs were paid around 20 to 30 times more than their employees.

Korea’s smaller wage gap compared to the United States is due to the lack of professional managers in Korean companies, as well as the tendency to decide a CEO’s compensation based on seniority rather than personal achievement. However, company owners were found to have higher wages.

Samsung Electronics is the only company in Korea at which pay is performance-based rather than dependent on seniority. Samsung Electronics Mobile Division president and CEO Shin Jong-kyun had the highest pay gap compared to its employees as he received 14.5 billion won ($12.2 million), 142 times more.

AmorePacific Group chairman Suh Kyung-bae received 4.44 billion won, 61 times higher than the average employee wage.



Lotte Group also showed a huge wage gap between its CEO and employees. Lotte Group founder Shin Kyuk-ho received 2.3 billion won from Lotte Shopping last year, which is about 68 times higher than the average employee.

BGF Retail Group Hong Seok-joh received 2.89 billion won from his company, which is 62 times more than his employees.

Meanwhile, Hyundai Motor Group chairman Chung Mong-koo received 5.72 billion won, which is about 59 times more than the average employee wage of 97 million won. Chung also receives 4.29 billion won from Hyundai Mobis, 48 times more than the average wage at the company.





LG Group chairman Koo Bon-moo received 4.42 billion won from its holding company LG Corp., which is 52 times that of the company’s average employee.

By The Korea Herald Superrich Team (sangyj@heraldcorp.com)

Kwon Nam-keun, Hong Seung-wan, Sung Yeon-jin, Bae Ji-sook, Yoon Hyun-jong, Min Sang-seek, Kim Hyun-il, Sang Youn-joo