Get All Access for $5/mo

This Company Caps CEO Pay Depending on How Much Its Lowest-Paid Employee Makes The highest-paid executive can only make five times as much as the lowest-paid employee.

By Sherin Shibu Edited by Melissa Malamut

Key Takeaways

  • Dr. Bronner’s, a 150-year-old family-owned business focused on soap and other household items, revealed its 5-to-1 salary cap on social media last week.
  • The highest-paid employee's salary is capped at five times more than the lowest-paid employee.
  • CEO compensation can be hundreds of times higher than what even middle-of-the-ladder workers make — the cap pay at the top of Dr. Bronner's is around $238,560, per Entrepreneur's calculations.

Dr. Bronner's estimates that a bottle of its soap is sold every two seconds — but the 150-year-old, family-owned business stands for more than just the products it puts on the shelves.

A social media post from Dr. Bronner's last week revealed an internal aspect of its business: the soapmaker limits the salary of its highest-paid executives to five times the lowest-paid, fully vested employee. (Fully vested means someone who is full-time and has been with the company for at least five years.)

"An ethical company should pay a fair salary and good benefits and enable people to make ends meet on the wages they receive," CEO David Bronner said, adding, "We're really trying to set an example of just being reasonable."

Dr. Bronner's 2023 earnings report details that the company generated over $170 million in revenue in 2022, with 86.7% of its sales conducted in the U.S. The soapmaker had 311 total U.S. employees and about 73% of its managers were promoted from within.

Dr. Bronner's starting pay for regular, non-temporary employees in 2022 was $24.85 per hour while temporary employee wages started at $21.30 an hour, per the report.

If a full-time employee stayed at the 2022 starting pay for five years, on a forty-hour workweek schedule, they would make $47,712 per year.

That would cap pay at the top of Dr. Bronner's at $238,560, per Entrepreneur's calculations.

Related: Here's Why Most CEOs Don't Take Pay Cuts to Avoid Layoffs

The midpoint salary of a CEO last year was around $1.3 million — over five times the estimated salary of Dr. Bronner's top-paid employee — according to a June study from the Associated Press.

The study tracked CEO pay at S&P 500 companies and found that in half of the firms, "it would take the worker at the middle of the company's pay scale almost 200 years to make what their CEO did."

The midpoint pay package for CEOs, factoring in salary, bonuses, and stock awards, was $16.3 million overall.

Related: These CEOs Have the Biggest Pay Packages in the U.S., According to a New Report

In addition to a salary cap, Dr. Bronner's covers childcare up to $7,500 per family, offers a healthcare plan with no out-of-pocket costs, and provides employees with an organic, vegan meal every day.

Anything the company has left over goes to charitable organizations and other causes. Bronner said in the Instagram video that he lives an "awesome" life and feels "enriched" by the joyful atmosphere in the office.

Sherin Shibu

Entrepreneur Staff

News Reporter

Sherin Shibu is a business news reporter at Entrepreneur.com. She previously worked for PCMag, Business Insider, The Messenger, and ZDNET as a reporter and copyeditor. Her areas of coverage encompass tech, business, strategy, finance, and even space. She is a Columbia University graduate.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Starting a Business

He Started a Business That Surpassed $100 Million in Under 3 Years: 'Consistent Revenue Right Out of the Gate'

Ryan Close, founder and CEO of Bartesian, had run a few small businesses on the side — but none of them excited him as much as the idea for a home cocktail machine.

Business News

Looking for a Remote Job? Here Are the Most In-Demand Skills to Have on Your Resume, According to Employers.

Employers are looking for interpersonal skills like teamwork as well as specific coding skills.

Business News

Meta Fires Employee Making $400,000 Per Year Over a $25 Meal Voucher Issue

Other staff members were fired for the same reason, per a new report.

Business News

'Jaw-Dropping Performance in 2024,' Says a Senior Analyst as Nvidia Reports Earnings

Nvidia reported its highly-anticipated third-quarter earnings on Wednesday.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.