Maximum Wage

What Stars and Star Investors Make Per Hour

Maximum Wage
February 13, 2015

Minimum wage debates have been going on for almost as long as there have been wages . But in a capitalist society, is there such a thing as a "maximum wage?"

Certainly some argue that there should be, as others argue that salaries at the high end of the spectrum are set by value provided by their services with no limit by definition. Either way, it can be insightful to consider translating the salaries of high wage earners to an hourly charge.

This number is not easy to calculate directly, because of the time value of investments and the fact that income for the very wealthy is often not in salary but in other forms such as stock options. Thus, the numbers are usually put in terms of total compensation.

Wealth-X, a group that specializes in reports and intelligence on the extremely wealthy, put out a survey in late 2013 listing some of the top "hourly" rates for the top earners in the U.S. We put hourly in quotes because the assumption is 24/7 working hours – although it can be argued that Warren Buffett does earn money in his sleep.

Here are four examples of the Wealth-X figures based on the first 345 days of 2013, starting with the aforementioned Oracle of Omaha:

  • Warren Buffett – Compensation of $12.7 billion, or approximately $1.54 million per hour. In case you are wondering, that is a little over 212,000 times the current federal minimum wage of $7.25 per hour.

  • Carl Icahn – With an income of $7.2 billion, his hourly wage works out to $869,595 – a mere 120,000 times minimum wage.

  • Bill Gates – The Microsoft Chairman raked in $11.5 billion, which converts to an hourly rate of $1.38 million.

  • Sergey Brin and Larry Page – The co-founders of Google each came in at $9.3 billion in income, or $1.12 million per hour.

    How do these salaries from investing and business compare to the highest salaries in the entertainment and sport industries, you ask?

  • Robert Downey, Jr. – According to Forbes, Downey, Jr. was the highest paid actor in 2013 with an estimated $75 million in income. Using the same 24/7/365 assumptions as with the investors and businessmen above, his hourly salary is $8561.64 per hour.

    If we assumed a typical 40-hour workweek, 260 working days (do stars work the weekend shift?), his hourly salary works out to $36,057.

  • Channing Tatum – It's a rough life to be good looking, a successful movie star, and a savvy businessman all rolled into one. Tatum has made shrewd moves with his movie compensation, bringing in $60 million this year. Using the assumptions above, that's either a $6849.32 or a $28,846 hourly rate.

  • LeBron James – In 2013, a mere $17,545,000 salary combined with $39 million in endorsements gives him a total salary of $56,545,000. There are fellow NBA players that make more than he does on the court (God only knows why), but with the combined income, his hourly rates are $6455 or $27,815.

    Thanks to his great stamina and some stunningly bad contracts enjoyed by other, less-worthy ballers, LeBron did not even make the top ten in 2012 salary per minutes played.

  • Floyd Mayweather, Jr. – The heavyweight champ tops the sporting world with $90 million in earnings, either $10,274 or $43,269 with the above assumptions

So, what can we learn from this? As disproportionately paid as athletes may seem to be, the real money is in investing and the founding of businesses. We would certainly rather aspire to wealth by emulating Warren Buffett than taking a charge from LeBron or taking a punch from Floyd Mayweather, Jr. – wouldn't you?

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