At this company, the CEO makes 6,000 times a typical worker's pay

It's no secret that the financial divide between CEOs and average worker in the U.S. has been growing. But in one case, the pay gap between corporate chiefs and employees has reached almost 6,000-to-1: Weight Watchers, where CEO Mindy Grossman earned 5,908 times what the median worker took home last year.

That's according to a new analysis of publicly reported compensation data by the AFL-CIO, the federation of unions. This year, public companies are for the first time required to compare the compensation of their CEO to a typical employee, data that the AFL-CIO analyzed along with its annual executive pay analysis. 

Many of the companies with the largest pay differential between their CEOs and workers are in service industries such as fast food and retail, where workers tend to work fewer hours and earn low wages. Across the board, CEOs are enjoying larger-than-average increases in comp, with the average pay rising 6.4 percent to $13.94 million in 2017. 

Worker pay has been stagnant for almost half a century, the AFL-CIO said. The overall ratio of CEO to worker pay now stands at 361 to 1, more than quadruple what it was nearly 40 years ago.

"If you compare that in 1980, it was 42 times the average worker and 107 times in 1990," said AFL-CIO secretary-treasurer Liz Shuler in a conference call, adding that CEO pay "is out of whack."

Weight Watchers CEO Grossman earned $33.4 million in 2017, which was her first year leading the diet company. Her pay was boosted by a $26.3 million one-time equity award. 

At the same time, the median employee pay at Weight Watchers is $6,013 per year, which is low because many of them are part-time workers. The company said in a filing that a typical employee works about 10.7 hours a week

"The WW CEO pay ratio disclosed on April 5 is unusually high due to two factors," the company said in an emailed statement. "First, the majority of our approximately 18,000 employees are part-time working fewer than 3 meetings per week, resulting in an unusually low median employee pay."

It added that the one-time incentive boosted Grossman's pay above typical levels. "If you remove such one-time items from Ms. Grossman's compensation, her annual compensation would have been approximately $8.9 million," it said.

Smaller gap than it seems?

To be sure, the pay ratios don't always reflect an apples-to-oranges comparison, such as in the case of Weight Watchers, where part-time workers are compared with a full-time CEO. That's an issue criticized by Mark J. Perry, a scholar at the conservative-leaning American Enterprise Institute, who has called the study "wildly inflated."

Among Perry's points is that the AFL-CIO ratio -- the 361-to-1 comparison -- is based on a typical worker's workweek, which is about 34 hours. But, he points out, CEOs don't work 34 hours a week, nor do most full-time workers at major corporations. 

Adjusting for longer workweeks for full-time workers, which he says is more comparable to the hours worked by a CEO, and including fringe benefits for workers lowers the pay ratio is about 117-to-1, he wrote in a blog post

The same issues could be said for the pay ratios reported by companies like Weight Watchers. Companies are given a fair amount of flexibility by securities regulators to calculate their typical worker's wages, which can lead to deceptively high or low wage information for both median worker pay and the CEO compensation that inform the ratios.

Below are the 10 companies with the largest CEO-to-worker pay ratios, according to the AFL-CIO. 

1. Weight Watchers International -- 5,908:1
2. Mattel -- 4,987:1
3. Abercrombie & Fitch -- 3,431:1
4. McDonald's Corp. -- 3,101:1
5. Gap -- 2,900:1
6. Live Nation Entertainment -- 2,893:1
7. Yum China Holdings -- 2,818:1
8. Aptiv -- 2,526:1
9. ManpowerGroup -- 2,483:1
10. First Data Corp. -- 2,028:1