It was a good year to be an employee at Verizon Communications Inc.
Among the top 20 U.S. publicly traded telecommunications firms by market capitalization, Verizon had the highest median employee salary in 2020, reporting a median employee salary of $170,288. The figure included a change in pension value during the year, which resulted in an increase of $47,830 for the median employee compensation.
Verizon CEO Hans Vestberg, by comparison, earned a total compensation package worth $19.1 million in 2020, giving the company a ratio of CEO-to-median employee compensation of 112x, higher than the industry median of 83.5x. Excluding the change in pension value from the median employee's total compensation, the median employee's annual pay would have been $122,458 and the CEO-to-median employee pay ratio would have been 156x.
In 2018, U.S. companies began disclosing comparisons of the top executive's pay to what they identified as a "median" employee. 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.
T-Mobile US Inc. had a pay ratio of 859x, the highest of the top 20 U.S. telecommunications firms by market capitalization, and a median employee salary of $63,949. T-Mobile CEO Mike Sievert earned a total compensation package valued at $54.9 million in 2020.
Sievert replaced John Legere as CEO in April 2020, and as a result, Sievert received one-time cash awards related to his new role. T-Mobile said these one-time awards make Sievert's compensation "atypically high." If the awards are removed from calculations, his annualized total compensation, as adjusted to include his employer-paid health benefits with respect to 2020, would be approximately $24.9 million, resulting in a pay ratio of 390x.
T-Mobile and Verizon used different methodologies for calculating median employee salaries. T-Mobile did not annualize compensation for any employees, noting in its proxy statement its "large part-time, retail and customer service employee population." Verizon, however, annualized compensation for employees who were not employed for the full 12-month period, excluding temporary and seasonal employees.
The company with the smallest CEO pay ratio among the analyzed firms was satellite communications company Globalstar Inc. Globalstar reported a median employee salary of $70,953 and a pay ratio of 10.0x.