RS Components has researched just how much some of the biggest tech CEOs are getting paid in comparison to their employees – but really, just how much more is it?
Working in the technology industry is immensely exciting due to its fast-paced nature, progressive attitude and mind-blowing discoveries that are literally occurring with each minute that passes. The sector is arguably having one of the most direct impacts on society and has never been more relevant as it is increasingly transforming the way we are doing things both at work and also at home. With an attitude driven by innovation, processes are being made quicker, faster and more efficient in a breadth of aspects, and as more breakthroughs are coming through, the industry has no signs of stopping.
To match the inspiring nature of the tech industry, working in the sector also has great financial benefits, as it provides a good wage with the average salary reaching an impressive £62,000. With the average UK salary amounting to £29,009, working in tech provides significant opportunity.
The average salary in the industry is also a reflection of the world we live in, where social media has an enormous impact on the globe with the likes of Facebook, Twitter and Instagram, combined with various services being provided with just a tap of our fingers on our digital screens, which companies such as Amazon, Apple and countless other tech companies.
With the significance of tech in nearly every industry, from entertainment, manufacturing, transportation and travel, it comes as no surprise the decent wages tech employees are gaining. But looking even further into some of the most profitable tech companies in the globe, it is clear that whilst employees are earning a healthy salary, the CEOs are the ones that are seeing the seriously impressive benefits of the industry.
But which tech CEOs are earning the most and how many days would it take their average employees to earn the salary of those at the top for just a single day’s work?
|Rank||Company||CEO pay per day ($)||Employee pay per day ($)||Days employee needs to work|
The results show that whilst being an employee in the tech sector can leave you with a better average wage compared to other industries, the real wealth of the industry is shown in the salaries of its CEOs and the astronomical difference some of these top individuals are earning compared to the rest of the company.
IBM comes out as the company with the biggest pay gap between its CEO and the average employee. CEO Ginni Rometty has held the position since January 2012 and earns a staggering daily salary of $90,411. Joining the company back in 1981 as a systems engineer, Rometty’s wage has increased, making her one of the highest paid CEOs in the tech industry. With IBM’s average employee pay amounting to $277, per day it would take them just under a year (327 days to be precise) to earn just what Rometty earns in one day, which is $90,411 – that is over 300 times more than what the average employee at IBM is earning.
Apple comes in at second place for having the widest pay gap between its CEO and the average employee. Tim Cook holds a daily wage of $43,014, which interestingly is not even in the top three highest CEO salaries studied, with Intel and Microsoft’s CEO’s earning at least $15,000 more each day. The average employee at Apple, however, earns the second lowest wage of all businesses analysed, at $152 per day. The lowest earning employees are Amazon at $78 each day. At Apple, it would take employees 283 days of work to reach Cook’s daily rate.
Fortunately, not all of the tech industry have such significant pay gaps between their employees, with Panasonic employees needing to work just 17 days to reach the daily salary of CEO Kazuhiro Tsuga, who earns $6,000 each day. Dell is close behind with employees needing to work 22 days to reach CEO Jo Seong-Jin’s daily salary.
The tech industry pays well and many employees sit well above the UK average income. However, there are issues when it comes to the difference in pay between CEOs and their employees. With the tech sector only set to increase in profit and investment, there is no denying the fact that CEOs pay will increase too, but how do we bridge the gap between employees and top CEOs?
RISK VS REWARD: IS AI TAKING OVER?
Xavier Fernandes, Analytics Director at Metapraxis
A study by Oxford University academics into “The Future of Employment” in 2013 prompted apocalyptic headlines which stated that in the future 40% of jobs will be automated thanks to advancing technology.
The researchers subsequently claimed that the truth was in fact a little more prosaic; rather than facing complete automation, the research found that 40% of jobs faced some aspect of automation in their activity. So with new ‘AI processes a likely reality for almost half us, what does that mean for our current roles and should we be worried?
The fourth revolution?
The first industrial revolution saw machines replacing muscle, both human and animal. The second and third saw electrical power, mass production and computerisation revolutionise the job market. Now, with daily headlines of AI as an employment superpower, there is some concern that AI is bringing a fourth revolution, and with it, unknown circumstances.
This ‘fourth industrial revolution’ is defined by replacing brain power with machines. Our thinking capacity is what inherently sets us apart from other species, so it’s not surprising that any encroachment on it triggers some existential angst.
Evolve to reap the rewards
While many businesses still don’t fully understand the capabilities of AI, those who fear its development are, instead of embracing it, missing all the benefits that it can bring to the workplace. Businesses that utilise AI appropriately are seeing vast improvements across their entire value chain; better customer experience, reduced costs, and more insightful analysis to support management decisions.
AI is particularly useful for supporting tasks with repetitive activity, for example, performing financial checks and assessing large sets of data within financial services firms. AI performs particularly well within this context, spotting outliers before a human expert would notice them, allowing impending problems to be flagged and avoiding costly mistakes.
There is also an increasing focus on maximising customer lifetime value through the use of AI. Being able to predict existing customers’ needs as well as track trends in their financial circumstances is supercharging the old cross-selling approach with testable, predictable outcomes.
With potential benefits like these on offer, management teams of innovative financial services are increasingly relying on AI to help them with some of the heavy-lifting of analysis. Using advanced data capabilities and learned behaviours, AI analyses market trends to provide predictions of future performance. This insight is invaluable and allows management teams to change direction and correct any problems accordingly. This offers a huge advantage over those that have not adopted such tools.
Supporting the workplace
Algorithms and AI are typically ‘smart’ at doing one, tightly-constrained task, but they can be less helpful with many of the activities that humans find straightforward. In most white-collar jobs, automation tends to replace certain tasks in the job, rather than the role in its entirety, as the need for human intelligence is still highly necessary. In particular, we still need human input to first challenge, and then synthesise, this information before taking action. Employees should therefore work with the business to proactively identify what areas of their role could be automated, so that they can focus on the areas that add real value to the business’ commercial goals.
Challenging AI is certainly still important. We know that algorithms can be much better than humans on certain, bounded tasks. However, many algorithms rely on existing data sets to build their understanding. As a result, when a business unit has ‘symptoms’ that fall outside of that body of knowledge, the algorithm may suggest the wrong course of action with costly results.
Indeed, even with plenty of data, algorithms will reflect any biases the data set contains. We’re seeing this with some legal sentencing algorithms where there is evidence that they are treating disadvantaged people more harshly. Getting the answers to why and how far we should trust our algorithms should therefore become an everyday part of any job affected by AI.
Rather than depending entirely on AI for all decisions, workers should be taking all these new, AI-generated insights and using them to complement the human decision-making process. No manager of a complex business ever has enough time to sieve through all the analysis available, but with AI driven algorithms able to flag up any issues and indicate where action needs to be taken, we may find that we have some AI ’colleagues’ who will cover our backs and suggest innovative options. Yes, there will be times when the algorithms get it wrong, but as long as we’re watching out for those, the future is bright.
HOW TECHNOLOGY IS FUTUREPROOFING STOCK MARKET TRADING
Tony Shaw, Executive Director, London Office and Head Sales UK & Ireland at the Swiss Stock Exchange
Markets are shifting, there’s no doubt. Amid all the disruption and volatility from the past year, the Swiss Stock Exchange asked traders about what they expected in 2020 and beyond in our industry survey. The findings point to a rise in digital to help traders content with external forces.
First and foremost, traders are enthusiastic about what digital assets can offer.
Two thirds of traders polled said they’d had a marked rise in interest from their clients for digital assets and crypto-products. Given the interest, traders are increasingly bullish about the potential of these products – so much so that 80% have predicted an increase in overall demand in the long term. Market users believe these assets will help generate cost synergies and streamlining trading and settlement processes by creating efficiencies and ultimately reducing costs.
Our 2019 results reflect what traders have told us when it comes to digital assets and products. Last year, we saw significantly higher trading volumes from products with crypto currencies as underlyings. Overall volumes grew by +8.5% over 2018, but the increase in crypto products alone was +17%, reaching CHF 518.2 million ($534.54 m). There was a year-on-year increase in the number of transactions, as well (+21%): 19,636 trades in total.
The potential digital assets hold is clear – evidenced by the building of the SIX Digital Exchange (SDX), a fully integrated issuance, trading, settlement and custody infrastructure for digital assets.
According to traders, artificial intelligence (AI) is expected to bring further benefits to market operations.
Two thirds of our survey respondents anticipate AI will create more opportunities for the traditional equities business, while a similar number expect it to reduce the cost of trading. Innovation in AI is already – and will continue to be – a key driver in making our industry more effective at withstanding future risks and challenges both within and beyond the market itself.
In Europe, there is growing momentum behind calls for shorter trading hours – this trend was reflected in our survey as well.
Industry groups such as the Investment Association are advocating for stock market trading hours to be cut from 8.5 to 6.5 hours to open the industry to working parents and women who cannot commit to such long workdays. We found traders were largely supportive of this, with many saying that it could even facilitate operational benefits. The roll of AI is clear here in improving efficiency while minimising time wastage: 36% of traders said the introduction of shorter trading hours would prompt greater market liquidity.
Beyond the market itself, geopolitics continue to shape wider market sentiment.
It comes as no surprise that four fifths of traders said their strategies have been – to some extent – influenced by Donald Trump’s tweets. Interestingly, only 39% of those polled viewed Brexit as an influencing factor in trading activity, while three quarters believe the US election will drive trading activity in 2020 and 65% acknowledged trade wars would also have an impact.
More broadly, traders are split on the state of the global economy – 58% are bracing for a global recession while 42% predict stable macro-economic conditions over the next three years. What seems clear is that whatever happens in the wider economy, traders are making headway with new technologies that can improve their strategy, efficiency, and overall market health.
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