Its fun to play with statistics, because like the bible, you can use them to support just about whatever position you’d like. So while Spanish statistician Miguel Calvo sifts through the splits (via an English translation by my Italian colleague Alberto Stretti) comparing Wilson Kipsang‘s 2:03:23 world record in Berlin three weeks ago with countryman Dennis Kimetto’s course record 2:03:45 at the Bank of America Chicago Marathon last Sunday, I’m digging into the money game.
As I wrote last week, there is no contest in how running’s money plays out for a Kenyan versus an American runner in terms of impact and purchasing power. But let’s make it more interesting and compare a top Kenyan runner, say Dennis Kimetto, with top business CEOs in terms of value for service.
For his superb Chicago effort Dennis Kimetto earned $100,000 in first-place prize money, and $75,000 more for his course record bonus. But there is also appearance money to consider, and sources in the industry peg the 2012 Berlin Marathon runner-up and 2013 Tokyo Marathon champion’s market value around $75,000. Finally, there is the shoe company bonus that sources say may be worth an additional $25,000 — $50,000. Conservatively, then, Mr. Kimetto banked give or take $300,000 for his Chicago win.
Obviously, that’s not near on par with the $10 — $30+ million that a top-level CEO will command on the open market, but with the average annual wage in Kenya resting at $1,700, Dennis’s prize purse and bonuses in Chicago represent 176 times the average Kenyans’ yearly earnings. That’s quite a day’s work, no doubt, though it required many months of intense preparation for Kimetto to earn that princely sum.
Yet, as high a paycheck as Kimetto’s was in Chicago in comparison to his average Kenyan neighbor’s take-home pay, what Dennis won last Sunday still lags behind the difference between a top CEOs pay across the Standard & Poor 500 Index of companies when compared to the average worker’s pay and benefits.
In fact, the 2012 average multiple of CEO compensation to that of rank-and-file worker stood at 204, up 20 percent since 2009. Topping the latest list was former JC Penney CEO Ronald Johnson, whose 2012 compensation of $53.3 million was 1795 times that of his average employees’ salary of $29,688. That is the equivalent difference in distance between the 26.2 miles of a marathon and 77 feet!
Of the 250 ranked CEO multiples, only Nike President Mark Parker had an affiliation with running. Mark’s multiple came in at # 8 on the list.
The winner of the upcoming ING New York City Marathon can take home as much as $900,000, given it is either Tsegay Kebede of Ethiopia or Stephen Kiprotich of Uganda, the two men still in the hunt for the $500,000 World Marathon Majors bonus for the 2012-2013 cycle.
As multiple-time major champions, either man would garner a higher appearance fee than Kimetto pre-Chicago. Plus, the shoe company bonus for a New York win is higher, as well. The multiple between $900,000 and $1700 is 529 (though Kiprotich is Ugandan, he lives and trains in Kenya. So we’ll use Kenyan figures, though Uganda’s average annual income is only two-thirds that of Kenya’s).
A multiple of 529 would place Olympic and World Champion Stephen Kiprotich 25th on the Top CEO Pay Ratio List, one spot in front of Exxon Mobil CEO Rex Tillerson, whose 2011 compensation of $34.9 million was 524 times that of the $66,605 the average Exxon Mobil employee earned.
Then, again, it might take 20 to 30 years of education and experience to rise to the level of CEO in a major corporation. Dennis Kimetto was still a subsistence farmer in 2010. Pretty solid per annum investment in training, I’d say.