You may have seen news headlines lately about CEO pay ratios. That’s a new disclosure companies had to begin filing this year, comparing the compensation of the CEO to that of the company’s “median employee.”

Calcbench Professional subscribers can research pay ratio disclosure several ways.

First, you can visit our Multi-Company page to find the actual numerical values that companies can disclose.

For example, we went to the Multi-Company page and pulled up the 2017 filings of the S&P 500. In the Standardized Metrics field (circled in blue, below) we entered “CEO Pay Ratio.” That pulled up the pay ratio disclosures the S&P 500 have made so far.

You can see they vary quite a bit, from Altria Group (12) to Align Technology (920).

As always with Calcbench, you can also use our Trace feature to go from that pay ratio number back to the source document the company filed with the SEC.

Text Disclosures, Too

Numerical values make for good headlines, but the methods companies use to calculate the ratio can vary widely, and one company’s ratio isn’t necessarily reflective of others. So Calcbench subscribers can also use our Interactive Disclosure tool to see where a company’s CEO pay ratio comes from.

For this example, we searched the text disclosures of the Dow Jones Industrial Average companies for “CEO pay.” (The exact phrase companies use might vary, but “CEO pay” or “CEO pay ratio” should capture most disclosures.)

One of the first results returned was United Technologies Corp. That brought us to this disclosure, shown below.

Companies are required to state how they arrived at the ratio, especially how they define a “median” employee. Still, the Securities and Exchange Commission gives companies considerable discretion in the calculations they use to reach the number. What’s more, companies that seem similar at first glance might have starkly different pay ratios depending on their business models.

For example, a large retail bank and a large investment bank are somewhat alike, and a CEO might need similar skills to run either one. But a large retail bank employs legions of bank tellers paid an hourly wage; a large investment bank employs a smaller number of M&A hotshots who make much higher salaries. So the retail bank would likely have a much higher CEO pay ratio than the investment bank.

As to the merits of pay ratio disclosure itself — that’s not a question for Calcbench to answer. Pay ratio disclosure has its supporters (“Yay, another way to determine whether the CEO is overpaid!”) and its detractors (“Really? This is a useful piece of information for investors?”).

Calcbench Professional subscribers can, however, find the numerical values and the text disclosures around pay ratios with a few simple keystrokes. That’s how we roll.