Income Inequality Methodology

In the United States, publicly-traded companies are required to report compensation figures to the Securities and Exchange Commission (SEC). At a minimum, these SEC filings include the five largest compensation packages in a given year. This data is typically reported at a company’s fiscal year end. There is no requirement to publish corporate minimum wages or equivalent compensation packages. Spendwell will make a good faith effort to identify and publicly confirm corporate minimum wages and when identified, will apply them to this income equality comparison, provided those corporate minimums have or had gone into effect for the years included in this ranking. Published corporate minimums that do not include the value of compensation beyond an hourly figure are converted to an annual compensation package the same way as the federal minimum wage: the hourly figure over a 2,080-hour work year, plus a standard benefits load that treats wages as 69% of total compensation. In lieu of a published corporate minimum compensation package, Spendwell uses a compensation package equivalent to US federal minimum wage earnings over a yearly period, calculated the same way.

Companies with a smaller gap between their most-compensated employee and their least-compensated employee rank higher than companies with larger gaps. In order to account for fluctuations in compensation and employee turnover, Spendwell reports on the last seven available years of compensation reporting: a company's most recently reported fiscal year and the six fiscal years before it. Spendwell reports on the 25 largest annual compensation packages reported over these seven years, which can include more than one package for the same executive; companies with fewer than 25 packages reported over the period, such as recently public companies, are assessed on every package available. This data is compared to published corporate minimum compensation for employees and contractors, where available. As noted, a compensation package based on the US federal minimum wage will be used in absence of a published corporate minimum wage or compensation package. If a company's published corporate minimum wage does not specifically include all contractors working for a company in any capacity, a compensation package based on the US federal minimum wage for comparison to most well paid executive.

In some reporting instances, Spendwell’s rankings will include private companies with no current compensation figures publicly available. These companies might be included in a report, but will be listed as not ranked unless they have voluntarily published necessary information and Spendwell has been made aware of its publication. All ranked companies are ranked based on the previously mentioned data reported to the SEC through end-of-year or annual reports, which can be accessed through the SEC’s Edgar search tool here:

SEC EDGAR SEARCH

Search for a company by name to view its filed DEF 14A reports (proxy statement).

For Spendwell's ranking purposes, executive income data is considered and compared to other companies based on the reported fiscal year a company designates in its annual report or proxy statement.