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CEOs Pay Soars 196x Wages While Workers Struggle

Widening Pay Gap: CEOs Earn Millions While Workers Struggle

June 5, 2024

 A new report reveals a growing disparity between CEO pay and employee wages in the United States. The analysis by Equilar and The Associated Press found that the median CEO at S&P 500 companies earned a staggering 196 times more than the median employee in 2023, up from 185 in 2022.

This widening gap is driven by a significant rise in CEO compensation, which is heavily tied to stock prices. In 2023, median CEO total compensation soared to $16.3 million, a 12.6% increase year-over-year. This contrasts sharply with the modest 5.2% increase in median employee pay for S&P 500 companies.

CEOs Pay Soars 196x Wages While Workers Struggle

Soaring Stock Market Fuels CEO Pay

The report attributes the surge in CEO compensation to the booming stock market. Stock awards, which make up about 70% of total CEO compensation, rose 10.7% to $9.4 million in 2023, fueled by the S&P 500's 24% increase.

Workers Struggle Despite Wage Gains

While employee wages did see some growth, it was significantly outpaced by inflation. The cost of living remains a major concern for workers, with Moody's Analytics reporting that Americans are spending $1,015 more per month on essential goods and services compared to 2021.

CEOs Pay Soars 196x Wages While Workers Struggle

Experts Call for Change

Corporate governance experts criticize the widening pay gap, arguing that companies need to ensure workers share in financial success. Eleanor Bloxham, CEO of The Value Alliance, emphasizes the importance of fair compensation for worker retention and long-term company health.

Outlier CEOs

The report also highlights some extreme cases. Broadcom CEO Hock Tan received a staggering $161.8 million in total compensation, largely driven by stock awards, making his pay 510 times that of the company's median employee.

CEOs Pay Soars 196x Wages While Workers Struggle

The Trend Continues

The strong performance of the S&P 500 so far in 2024 suggests that the trend of high CEO compensation may continue, potentially widening the gap with employee wages even further.