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Prisoner Education Guide

Major Wage Ratio Gap Between Executives, Employees at Private Prisons

by Steve Horn

Securities and Exchange Commission (SEC) filings reviewed by Prison Legal News show a major gap between the pay of private prison employees and the executives of those companies. And, according to a new report by the non-profit group Public Citizen, those numbers may not reflect the whole reality when extremely low wages paid to immigrant detainees are taken into account.

Required to include wage ratio details under Section 953(b) of the Dodd-Frank Act of 2010, SEC filings for private prison firms The GEO Group and CoreCivic (formerly Corrections Corporation of America) reveal their top executives are paid dozens of times more per year than the median pay of the companies’ employees.

With respect to GEO Group, CEO George Zoley made $9.6 million in total compensation in 2017 – a ratio of 271:1 compared to the median pay for rank-and-file workers. For CoreCivic, the ratio between the annual compensation of CEO Damon Hininger, who received a total of $2.37 million last year, and median employee wages was a more reasonable 62:1.

According to survey results published in February 2018 by Equilar, Inc., a firm that provides intelligence solutions and data for boards of directors of major corporations, the wage ratio gaps at GEO and CoreCivic are part of a broader trend within corporate America. Equilar found the median wage ratio gap at 356 public companies included in the survey was 140:1. GEO Group’s wage ratio gap was almost twice that.

Utilizing information from SEC filings, the median wages paid to GEO and CoreCivic employees are lower than the median wages reported by Equilar for comparable corporations. According to SEC filings, the median employee income for CoreCivic was $38,236 in 2017, while for GEO Group it was $35,630.

Equilar reported that for companies with gross revenue between $1 billion and $5 billion, median employee pay is $62,900 per year – significantly higher than the wages paid to GEO and CoreCivic workers. And according to payscale.com, prison guards earn median wages of $43,300 annually, based on March 2018 data. Thus, it appears that private prison staff are paid substantially less than their counterparts in state and federal prisons – which is in keeping with the business model of the private prison industry.

Previously, PLN reported that the median salary for private prison guards in 2015 was $32,290 – or a bit lower than the numbers reported by CoreCivic and GEO Group for fiscal year 2017. [See: PLN, July 2016, p.59].

On March 29, 2018, the Washington, D.C.-based group Public Citizen sent a letter to the SEC’s Division of Corporate Finance, noting that a lawsuit filed by immigrant detainees at GEO Group’s Aurora Detention Center in Colorado states they are paid just $1 a day for their labor. Public Citizen contended that if you count the estimated 10,000 or more detainees who work in GEO Group facilities at slave wages, the ratio between the company’s CEO and median employee compensation would soar to an astounding 32,000:1.

“While the litigation is pending, the facts about pay are not in dispute,” wrote Public Citizen, which has called for the Division of Corporate Finance to investigate the matter to ensure the wage ratio was tallied accurately by GEO Group. “We believe the Division should require GEO and firms in like circumstances to enumerate these unconventional employment circumstances.”

At GEO Group’s annual shareholder meeting, held by teleconference on April 24, 2018, PLN managing editor Alex Friedmann, who owns a small amount of GEO stock as an activist shareholder, questioned the disparity between the company’s CEO and employee pay, asking whether GEO has “any plans moving forward to address this wide gap between CEO compensation and median employee compensation.”

The company’s response? “We will continue to evaluate compensation best practices which are fair to all of our employees and are commensurate with their responsibilities, functions and experience.”

Sources: www.sec.gov, www.equilar.com, www.citizen.org, www.salary.com

 

This article has been edited to correct an incorrect amount of 2017 compensation initially reported for CoreCivic CEO Damon Hininger.


 

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