CEO pay in the U.S., according to research released by EPI on Tuesday, CEO pay has skyrocketed by a staggering 1,460 percent since 1978. This has far outpaced the growth of the economy and even the pay of the top 0.1 percent, EPI finds, with the S&P stock market growing by 1,063 percent in the same time and the earnings of the top 0.1 percent growing 385 percent between 1978 and 2020.
By contrast, worker pay has remained relatively unchanged since 1978, rising by a mere 18.1 percent over the past 43 years.
As a result, the gap between CEO pay and typical worker pay has grown significantly. While CEOs at the top 350 U.S. firms had an estimated average pay of $27.8 million in 2021, the average worker at the same firms made $70,400, the report shows.
This is a ratio of about 400 to 1 in 2021 — itself a major multiplication of 1965’s ratio of 20 to 1 and 1978’s ratio of about 30 to 1.
While millions of people were laid off or furloughed and frontline workers risked their lives to keep basic services running between 2019 and 2021 during the covid pandemic, CEO pay jumped by 30.3 percent. Among workers who were still employed, meanwhile, wages rose by only 3.9 percent.
Researchers specifically chose to exclude Musk and Tesla from their analysis because, if his realized salary, including stock sales, had been included, his pay would have been almost 1,000 times that of the average CEO of a large company. This would have boosted the average CEO pay increase between 2020 and 2021 by over 300 percent.
EPI economists Josh Bivens and Jori Kandra write, “CEOs are getting ever-higher pay over time because of their power to set pay and because so much of their pay (more than 80 percent) is stock-related. They are not getting higher pay because they are becoming more productive or more skilled than other workers, or because of a shortage of excellent CEO candidates.”
CEO Pay Has Grown by 1,460 Percent Since 1978, as Workers’ Wages Stagnate (truthout.org)
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