What’s the ROI on Your Salary?Posted: December 28, 2012
When Forbes published a list of the Hollywood actors whose films generate a great deal of revenue in proportion to their reported salaries (as well as actors who have low box office receipt-to-salary rations) it raised an interesting question about how much bang-for-the-buck our organizations get from what we cost them. This is not a straight forward question even for people in jobs, like sales, where there is apparently more of a direct-line-of-sight between effort and skill and the resulting sales.
For example, a salesperson might generate a lot of sales but perhaps they eroded margin through various discounts and credits. Or what about the salesperson whose sales results are distorted due to the large and lucrative accounts they inherited versus the salesperson who has to cold call? Some jobs lend themselves to estimating the value added through their efforts. For example, a Hermes bag is typically the result of only a few craftspeople; subtract the cost of the materials and look at the marked-up value of the bag and you can get a rough idea of the economic result from that artisan’s efforts.
In many cases estimating what one person’s ROI is difficult because many projects are the result of collaboration. Forbes’ Hollywood star calculation is comparing the star’s salary to the movie’s box office receipts but obviously the success of a film depends on numerous factors: the quality of the script, the performances of the other actors, the timing of when it was released and against what other new films, the skills of the director etc.
Still, in concept it is an interesting idea to try to think about what impact, in dollars and cents, your efforts generate.
For the record, here is Forbes’ ranking:
Methodology: Hollywood pays its biggest stars millions of dollars per film. Some are paid way too much but these 10 are worth every penny. We used data gathered from our Celebrity 100 research and Box Office Mojo to calculate how much, on average, each star’s last three films earned at the box office per dollar of pay. Think of it as a star return on investment number.
The box office has been very kind to Natalie Portman and Kristen Stewart over the last few years.
Thanks to stellar returns on films like “The Black Swan” and “Twilight: Breaking Dawn,” both leading ladies have topped Forbes magazine’s list of Hollywood’s most bankable stars. After considering the actors’ earnings, along with their last three major movies’ box-office receipts and budgets, Portman was determined to be the most valuable player in the industry. (Note:
“Black Swan,” Darren Aronofsky’s ballet thriller that earned Portman her first Oscar, only cost $13 million, but it went on to gross $329 million worldwide. Her “No Strings Attached,” a $25 million rom-com co-starring Ashton Kutcher, raked in $150 million worldwide.
Though her other comedic venture, “Your Highness,” failed to recoup its $50 million budget, Forbes estimates studios earned $42.70 for every buck they paid Portman.
1. Natalie Portman ($42.70 for every $1 paid)
2. Kristen Stewart ($40.60 for every $1 paid)
3. Shia LaBeouf ($35.80 for every $1 paid)
4. Robert Pattinson ($31.70 for every $1 paid)
5. Daniel Radcliffe ($30.50 for every $1 paid)
6.Taylor Lautner ($29.50 for every $1 paid)
7. Bradley Cooper ($25 for every $1 paid)
8. Dwayne “The Rock” Johnson ($22.70 for every $1 paid)
9. Amy Adams ($22.60 for every $1 paid)
10. Kevin James ($22.40 for every $1 paid)
Here is Forbes’ list of Hollywood’s Most Overpaid Stars:
- Eddie Murphy ($2.30 for every $1 paid)
- Katherine Heigl ($3.40 for every $1 paid)
- Reese Witherspoon ($3.90 for every $1 paid)
- Sandra Bullock ($5 for every $1 paid)
- Jack Black ($5.20 for every $1 paid)
- Nicolas Cage ($6 for every $1 paid)
- Adam Sandler ($6.30 for every $1 paid)
- Denzel Washington ($6.30 for every $1 paid)
- Ben Stiller ($6.50 for every $1 paid)
- Sarah Jessica Parker ($7 for every $1 paid)