A lot has been said about the pay of CEOs in the US lately. Is it too much or too little? And of course, there are always two sides to any story. The Citizen’s article, ‘Are top executives getting paid too much?‘, argues that CEO pay is part and parcel of a free market system that is working. Fair enough, so let’s compare it to CEO compensation in other free markets.

The top 200 companies in the US pay their CEOs 2.5 times more than the top 100 European companies – including the UK. But have a look at the Japanese CEOs before you feel too sorry for the European CEOs. In the US, midsized companies with sales of around $500 million pay their CEOs around $2.2 million. Their European counterparts in the UK, Germany and France received about $1.2 million. In Japan, the typical CEO of this size company received just over $540,000.

Now let’s compare this to the average worker’s salary.  Japanese CEO’s typically only earn about 10-15 times what the average worker earns – marginally lower than Germany. In France it is closer to 15-20 times, and the UK just over 25 times. The second highest ratio can be found in Brazil – around 60 times. The US leads the pack at… around 530 times…

Last thing on compensation, there was some outcry from investors and activists when they heard that JP Garnier from GSK might get up to $28 million if he leaves the company. And they threw their toys when they heard he was going to get paid… wait for it… almost $10 million! That would not make a splash in the news in the US – even for the second largest pharmaceutical company in the world. It makes you wonder how US CEO’s might be treated if they had to face some of the investors in Europe over their pay – and return on investment.

This is not an argument for or against current debates in CEO compensation. People will only complain when they stop believing they are getting value for their money. It is more of a reminder that we live in a global world where shareholders (and activists) are from across the globe – and they expect global standards and practices. And that is what they are not getting at the moment.