Triad newcomer Lumentum jumps to top of CEO to employee pay ratio gap list

A corporate newcomer to the Triad's advanced manufacturing sector - Lumentum Holdings Inc. - has set a new record for largest pay gap between chief executives and rank-and-file employees.

The eighth-annual CEO pay ratio report by the Winston-Salem Journal and News & Record comes each May.

The report is timed after most of the 34 publicly traded corporations based in the Triad, or with significant operations in the region, have disclosed their previous year's executive compensation in a regulatory proxy filing.

As has been the case for most of the CEO pay ratio reports, the compensation gap continued to mushroom during fiscal 2025, led again by global apparel and equipment manufacturers and the nation's fourth-largest bank.

However, Lumentum chief executive Michael Hurlston leaped to the top in 2025 for two primary reasons: the $24.74 million value of his stock awards for fiscal 2025; and the $9,595 median annual compensation for its 11,000 global employees.

Lumentum, based in San Jose, Calif., is a global equipment supplier to large-scale data centers. It entered the Triad business market in February when it spend $18 million to purchase a former Qorvo Inc. semiconductor manufacturing plant in Greensboro

Publicly traded companies are required to declare the value of stock awards in executive compensation when they are awarded. The value typically is measured over three years and requires the executive to meet certain vesting eligibility requirements to receive the full amount.

Meanwhile, median is defined as the middle value in a list of numbers. Median employee compensation factors in regular pay, overtime, bonuses, incentives, allowances and paid time off.

As a result, Hurlston's CEO pay ratio was $2,884 in compensation for every $1 earned by the median Lumentum employee.

Hurlston's stay at the top of the CEO pay ratio chart is likely to be a one-time occurrence. Lumentum said $23 million of Hurlston's $24.74 million in stock awards value was to compensate him for "incentive opportunities by leaving his prior employer."

Lumentum has pledged to preserve and create more than 400 jobs - many of whom are projected to be former Qorvo employees - and spend more than $600 million on capital investments.

An element of the Dodd-Frank federal regulatory act that went into effect in 2017 requires corporations to put a number and a dollar-to-dollar ratio to the annual total compensation gap between CEOs and their median employee total compensation.

The Journal and News & Record also report on the ratio between CEO base salary and median employee total compensation.

As has been the case in recent CEO pay ratio reports, the stock market is playing the biggest role in boosting total compensation. Many corporations have made stock and stock options awards a primary, if not the largest, financial factor in CEO compensation in recent years.

The strategy has been more directly tying CEO compensation to overall company financial performance, particularly share price.

Another major factor: many chief executives have benefited immensely from company share-repurchase programs, which typically make the remaining outstanding shares more valuable.

Those factors showed up more when reviewing the CEO pay ratios in the financial services, manufacturing, logistics, health care and retail sectors.

The arrival of Lumentum comes in a transition time for the Triad business community.

HanesBrands Inc. chief executive Stephen Bratspies has led the Triad's CEO pay ratio chart for most of its existence.

However, the Winston-Salem apparel manufacturer was sold in December to rival Gildan Activewear Inc. for $4.4 billion, becoming the Montreal manufacturer's U.S. operational hub.

Because of the timing of the Gildan purchase, HanesBrands' fiscal 2025 executive compensation are not likely to be disclosed by Gildan.

For fiscal 2024, Bratspies received $1,893 in total compensation for every $1 made by HanesBrands' median employee, as well as $196.54 in base salary. The bulk of Bratspies' total compensation was stock awards valued at $8.28 million.

Third on the CEO pay ratio list is Kontoor Brands Inc.'s Scott Baxter with $13.2 million in total compensation and $1.29 million in base salary.

With the median Kontoor employee making $10,618 in total compensation, Baxter's CEO pay ratio was $1,243 to $1 and his base salary ratio was $121.25 to $1.

Kontoor reported earlier in May it has about 2,800 U.S. employees, including about 700 at its headquarters and about 350 in Mocksville.

The manufacturer reports that 47% of its 10,600 workforce is based in Latin America and Mexico, along with 28% in the U.S., and 25% in either the Asia-Pacific or the Europe, Middle East, and Africa regions.

Fourth on the CEO pay ratio list is Wells Fargo's Charlie Scharf with $94.52 million in total compensation and $2.5 million in base salary. With the median Wells Fargo employee making $82,044 in total compensation, Scharf's CEO pay ratio was $1,152 to $1 and his base salary ratio was $30.47 to $1.

Wells Fargo explained that $60 million of the 2025 compensation is related to a special award for Scharf's leadership in the bank resolving 13 federal regulatory consent orders related to its fraudulent customer account scandal that surfaced in September 2016.

The award was split 50% stock options and 50% restricted stock rights.

Fifth on the CEO pay ratio list is Tyson Foods Inc's Donnie King with $34.47 million in total compensation and $1.66 million in base salary.

With the median Tyson Foods employee making $43,206 in total compensation, King's CEO pay ratio was $798 to $1 and his base salary ratio was $38.47 to $1.

The AFL-CIO union says tracking the CEO pay ratio does - and should - matter to employees and investors.

"High CEO-to-worker pay ratios contribute to economic inequality and can undermine employee morale and productivity," the union said in its 2025 report.

"In 2024, the average CEO-to-worker pay ratio for S&P 500 companies was 285-to-1."

For the Triad, there were nine corporations who exceeded that ratio, the others being Skyworks Solutions Inc. chief executive Phil Brace ($716.50 to $1), Lowe's Cos. Inc.'s Marvin Ellison ($577.50 to $1), JPMorgan Chase & Co.'s Jamie Dixon ($363.10 to $1) and Laboratory Corp. of America's Adam Schechter ($291.44 to $1).

The union said one potential remedy for breaking the rising CEO pay ratio is for "large corporations (to) pay their fair share by increasing corporate taxes if their CEO-to-worker pay ratios exceed $50-to-$1."

Increasing the federal tax rate for corporations with a CEO-to-worker pay ratios exceed $50-to-$1 has support from U.S. Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass.

Their goal with legislation is "to take on corporate greed by raising taxes on companies that pay their top executives at least 50 times more than the pay of a median worker."

Under such legislation, 32 of the 35 corporations listed in the latest CEO pay ratio chart would have had to pay the tax for their chief executive's total compensation in fiscal 2024.

A September 2025 report from the left-leaning Economic Policy Institute - the latest in an annual series - found that the CEO pay has soared 1,094% since 1978, compared with a 26% rise in what it termed "typical workers' pay."

"To some analysts, the dramatic rise in CEO compensation has been driven largely by the demand for the skills of CEOs and other highly paid professionals," according to the institute's report.

"In this interpretation, CEO compensation is being set by the market for skills or talent. The 'market for talent' argument is based on the premise that it is other professionals, too, not just CEOs, who are seeing a generous rise in pay.

The institute said other analyses have determined that the long-term increase in CEO pay "rather reflect the power of CEOs to extract excessive pay packages from compliant corporate boards."

To reduce the CEO pay ratio gap, the institute recommends: using tax policy to incentivize lower CEO pay; making shareholder votes on CEO compensation more binding; and using antitrust enforcement and regulation to rein in the market power of the largest firms.

"Further, increasing typical workers' leverage to secure higher pay from firms would leave less left over for CEOs and other executives to claim - so raising typical workers' pay will provide a rein on CEO pay as well."

Some pro-business groups, such as the U.S. Chamber of Commerce and National Retail Federation, fought efforts to disclose the CEO pay ratio.

The retail trade group calls the ratio "a flawed measure that unfairly singles out industries, like retail, which have high percentages of part-time, seasonal and entry-level employees."

"Failing to adjust for the large number of part-time and seasonal workers inflates retail's ratios by an estimated 31% over typical employers."

The federation recommends comparing median earnings that factor out part-time workers.

The chamber has referred to the reporting requirement of the CEO pay ratio as an example of an unnecessary financial burden for corporations.

The chamber said global companies shouldn't be overly criticized because they source lower-cost production offshore; the strategy has led to lower prices for U.S. consumers on many imported products.

Zagros Madjd-Sadjadi, an economics professor at Winston-Salem State University, called "tone deaf" current compensation levels for CEOs, "especially given worker raises that often do not keep pace with the cost of living amid the continuing affordability crisis."

"That being said, many boards find it difficult to attract and retain talent that can meet their expectations without offering substantial compensation packages for such executives."

Madjd-Sadjadi called a "more problematic issue" is when incentive packages do not align with effectively and independently increasing shareholder value in the case of for-profit enterprises or with advancing a non-profit's mission.

"CEO pay should reflect the added value that the CEO brings, so if the entire industry is doing well or doing poorly, this should be taken into account, with CEO compensation adjusted accordingly," he said.

"CEOs who do not consistently exceed industry benchmarks should not be receiving outsized compensation packages, while CEOs who consistently fall short of those benchmarks should find their tenure cut short with relatively modest severance packages when compared to others in the same industry."

Mark Vitner, chief economist with Charlotte-based Piedmont Crescent Capital, said "boards of directors feel pressure to offer competitive packages, including performance bonuses and equity awards, to attract and retain executives capable of driving growth and operational efficiency."

"Performance-based incentives are appropriate in principle. Leaders who deliver strong financial results, quality improvements and strategic growth should be rewarded.

"However, in today's affordability crisis environment, when families are struggling with rising premiums and medical debt, multimillion-dollar executive compensation packages have become difficult for the public to accept."

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