Trump was reportedly shocked to learn his top military officer doesn't make millions — here's why generals make fractions of CEOs' salaries

Olivier Douliery-Pool/Getty Images
  • President Trump mistakenly thought his top military officer makes $US5 million per year, according to the Washington Post.
  • The newspaper reported that the president was surprised to find out the general’s base salary is $US200,000.
  • Trump is more familiar with a corporate model for compensation, in which CEOs typically make over 300 times the salary of their average employee when all compensation is factored in.
  • All military personnel receive the same pay raise, regardless of rank.

The commander in chief was way off when he thought his top military officer made millions, according to a report by The Washington Post.

The Post marked it as an example of how out-of-touch the president is with federal spending and the military. When prompted by his chief of staff, who is a retired general, the president guessed that Gen. Joe Dunford, the chairman of the Joint Chiefs of Staff, earns $US5 million, the report said.

Trump was surprised, sources told The Post, to find that Dunford’s base salary is less than $US200,000.

That may be because Trump is more familiar with a corporate model for compensation, which notoriously overpays chief executives via high salaries, lucrative bonuses, and stock options.

CEOs also typically receive pay raises at a much higher percentage than their employees. A study from the Economic Policy Institute showed that in 2017, the average CEO salary increased by nearly 18% while employee pay increased by as little as 0.3%.


Read more:
A new study found CEOs at America’s biggest companies raked in $US19 million on average last year, while workers’ pay barely budged

Military pay, by comparison, is strictly regulated. Salaries are limited by US Code and overseen by the same entity that manages all government compensation.

In terms of base pay, military personnel are compensated based on rank and time in service. Typically, troops advance to the next bracket when promoted and after every two years of additional experience, though there are some exceptions.

For example, an E-5 (an enlisted service member rank) who has six years of experience receives just over $US2,850 per month in base pay, according to 2017 pay tables. Her battalion commander, an O-5 (an officer rank) with 15 years of service, made nearly three times that amount. These figures do not include the housing allowance, which takes into account the price of housing in the area and whether the person has children.

Pay raises are also regulated. Regardless of rank, base pay is increased by the same percentage, calculated by the Bureau of Labour Statistics and finalised by the president. So, when the E-5 saw her monthly salary increase by 2.6% at the start of the 2019 fiscal year, her battalion commander’s pay also increased by 2.6%.

Dunford made roughly five-and-a-half times the E-5’s salary last year – a striking comparison to the average CEO, who made 312 times her employees’ salaries.

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