--- title: "Meaning & Key Takeaway of: In 1980, the compensation of the average…" description: "\"“In 1980, the compensation of the average chief executive officer was forty-two times that of the average worker; by the year 2004, the ratio had soare..." image: "https://sms4smile.com/quotes/i/8b0/john-bogle-156368_creating-value_in-1980-the-compensation-of-the-average_2124652.jpg" --- # In 1980, the compensation of the average chief executive… ![“In 1980, the compensation of the average chief executive officer was forty-two times that of the average worker; by the year 2004, the ratio had soared to 280 times that of the average worker (down from an astonishing 531 times at the peak in 2000). Over the past quarter-century, CEO compensation…” quote by John Bogle](https://sms4smile.com/quotes/i/8b0/john-bogle-156368_creating-value_in-1980-the-compensation-of-the-average_2124652.jpg) [Download](https://sms4smile.com/quotes/i/8b0/john-bogle-156368_creating-value_in-1980-the-compensation-of-the-average_2124652.jpg) [Open image](https://sms4smile.com/quotes/i/8b0/john-bogle-156368_creating-value_in-1980-the-compensation-of-the-average_2124652.jpg) > ““In 1980, the compensation of the average chief executive officer was forty-two times that of the average worker; by the year 2004, the ratio had soared to 280 times that of the average worker (down from an astonishing 531 times at the peak in 2000). Over the past quarter-century, CEO compensation measured in current dollars rose nearly sixteen times over , while the compensation of the average worker slightly more than doubled. Measured in real(1980) dollars, however, the compensation of the average worker rose just 0.3 percent per year, barely enough to maintain his or her standard of living. Yet CEO compensation rose at a rate of 8.5 percent annually, increasing by more than seven times in real terms during the period. The rationale was that these executives had "created wealth" for their shareholders. But were CEOs actually creating value commensurate with this huge increase in compenstion? Certainly the average CEO was not. In real terms, aggregate corporate profits grew at an annual rate of just 2.9 percent, compared to 3.1 percent for our nation's economy, as represented by the Gross Domestic Product. How that somewhat dispiriting lag can drive average CEO compensation to a cool 9.8 million in 2004 is one of the great anomalies of the age.”” John Bogle ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. CEO pay has skyrocketed far beyond worker wages, raising questions about value creation and fairness. **In simple terms:** CEO salaries vastly outpace average workers. Key Takeaway Demand transparency and fairness in executive compensation. Themes economics income inequality corporate governance fairness Mood critical concerned Type Creating value:1 Time:0 Two Time:0 Ceo Compensation:1 Average Ceo:0 Compensation Average:0 Compensation Rose:0 1980 Compensation:0 When to use this quote - board meetings - shareholder activism - policy debates Key Concepts shareholder value labor economics Questions to Reflect On - Is compensation linked to actual value created? - How can firms align executive pay with performance? A Different Perspective High pay may attract talent but can demotivate staff. ★ ★ ★ ★ ★ No ratings yet [Creating value](https://sms4smile.com/quotes/about/creating-value/) [Time](https://sms4smile.com/quotes/about/time/) ## Related quotes > [“In 1980, the average CEO made forty-two times what an average hourly worker took home. By 2005, the ratio was 262 to 1.”](https://sms4smile.com/quotes/barack-obama/in-1980-the-average-ceo-made-forty-two-times-what-an-average-hourly/) [Barack Obama](https://sms4smile.com/quotes/author/barack-obama/) > [Compensation needs to be predominately performance-driven. If CEO compensation was performance-driven, which I believe it was in IBM's case, nobody would ever argue. If…](https://sms4smile.com/quotes/louis-v-gerstner-jr/compensation-needs-to-be-predominately-performance-driven-if-ceo/) [Louis V. Gerstner, Jr](https://sms4smile.com/quotes/author/louis-v-gerstner-jr/) > [“We find that firms with award-winning CEOs subsequently underperform, in terms both of stock and of operating performance. At the same time, CEO compensation…](https://sms4smile.com/quotes/daniel-kahneman/we-find-that-firms-with-award-winning-ceos-subsequently-underperform/) [Daniel Kahneman](https://sms4smile.com/quotes/author/daniel-kahneman/) > [The inequality between CEO compensation and the compensation received by workers and stockholders has grown to such an extent that it endangers our economy…](https://sms4smile.com/quotes/danny-k-davis/the-inequality-between-ceo-compensation-and-the-compensation-received/) [Danny K. Davis](https://sms4smile.com/quotes/author/danny-k-davis/) > [If CEO compensation was performance-driven, which I believe it was in IBM's case, nobody would ever argue. If the shareholders didn't make billions and…](https://sms4smile.com/quotes/anonymous/if-ceo-compensation-was-performance-driven-which-i-believe-it-was-in/) [Anonymous](https://sms4smile.com/quotes/author/anonymous/) > [The good movies that people want to keep are probably creating their value more than anything else.](https://sms4smile.com/quotes/bill-mechanic/the-good-movies-that-people-want-to-keep-are-probably-creating-their/) Bill Mechanic > [“A credible communist threat would offer people another use for their accelerating abilities besides creating value for profiteers or trying to become one of…](https://sms4smile.com/quotes/anonymous/a-credible-communist-threat-would-offer-people-another-use-for-their/) [Anonymous](https://sms4smile.com/quotes/author/anonymous/) > [All space must be attached to a value, to a public dimension. There is no private space. The only private space that you can…](https://sms4smile.com/quotes/paulo-mendes-da-rocha/all-space-must-be-attached-to-a-value-to-a-public-dimension-there-is/) Paulo Mendes da Rocha > [Try not to become a man of success, but a man of value. Look around at how people want to get more out of…](https://sms4smile.com/quotes/albert-einstein/try-not-to-become-a-man-of-success-but-a-man-of-value-look-around-at/) [Albert Einstein](https://sms4smile.com/quotes/author/albert-einstein/) > [“If you are truly concerned about helping people and creating value for them in your business and life. God will take care of you,…](https://sms4smile.com/quotes/bernard-kelvin-clive/if-you-are-truly-concerned-about-helping-people-and-creating-value/) [Bernard Kelvin Clive](https://sms4smile.com/quotes/author/bernard-kelvin-clive/) > [I have never compromised on fundamentals. I've always believed in focusing on creating value and not valuation.](https://sms4smile.com/quotes/bhavin-turakhia/i-have-never-compromised-on-fundamentals-i-ve-always-believed-in/) [Bhavin Turakhia](https://sms4smile.com/quotes/author/bhavin-turakhia/) > [The Web 2.0 world is defined by new ways of understanding ourselves, of creating value in our culture, of running companies, and of working together.](https://sms4smile.com/quotes/john-battelle/the-web-2-0-world-is-defined-by-new-ways-of-understanding-ourselves/) [John Battelle](https://sms4smile.com/quotes/author/john-battelle/) > [“Management must think of itself not as producing products but as providing customer-creating value satisfactions. It must push this idea (and everything it means…](https://sms4smile.com/quotes/harvard-business-school-press/management-must-think-of-itself-not-as-producing-products-but-as/) Harvard Business School Press > [If we can fall in love with serving people, creating value, solving problems, building valuable connections and doing work that matters, it makes it…](https://sms4smile.com/quotes/seth-godin/if-we-can-fall-in-love-with-serving-people-creating-value-solving/) [Seth Godin](https://sms4smile.com/quotes/author/seth-godin/) > [Our system here of creating value for others and having people do the right thing, exchange information, and so on only works if people…](https://sms4smile.com/quotes/charles-koch/our-system-here-of-creating-value-for-others-and-having-people-do-the/) [Charles Koch](https://sms4smile.com/quotes/author/charles-koch/) ## More Creating value quotes > [Our system here of creating value for others and having people do the right thing, exchange information, and so on only works if people…](https://sms4smile.com/quotes/charles-koch/our-system-here-of-creating-value-for-others-and-having-people-do-the/) [Charles Koch](https://sms4smile.com/quotes/author/charles-koch/) > [If we can fall in love with serving people, creating value, solving problems, building valuable connections and doing work that matters, it makes it…](https://sms4smile.com/quotes/seth-godin/if-we-can-fall-in-love-with-serving-people-creating-value-solving/) [Seth Godin](https://sms4smile.com/quotes/author/seth-godin/) > [“Management must think of itself not as producing products but as providing customer-creating value satisfactions. 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We do…](https://sms4smile.com/quotes/charles-koch/so-to-the-best-we-can-what-we-do-is-focus-on-creating-value-for/) [Charles Koch](https://sms4smile.com/quotes/author/charles-koch/) [Browse all 42 Creating value quotes ](https://sms4smile.com/quotes/about/creating-value/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "Quotation", "text": "“In 1980, the compensation of the average chief executive officer was forty-two times that of the average worker; by the year 2004, the ratio had soared to 280 times that of the average worker (down from an astonishing 531 times at the peak in 2000). Over the past quarter-century, CEO compensation measured in current dollars rose nearly sixteen times over , while the compensation of the average worker slightly more than doubled. Measured in real(1980) dollars, however, the compensation of the average worker rose just 0.3 percent per year, barely enough to maintain his or her standard of living. 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