Communications of the ACM
Stark Disparity Seen In CEO, Typical Worker Pay Increases
The economy would suffer no harm if CEOs were paid less or taxed more, EPI reports.
Credit: Getty Images
CEO compensation at the top 350 U.S. firms dipped in 2022 but remains enormous compared with the pay of other workers, according to a new Economic Policy Institute report. Average CEO compensation — including stock awards and options — was $25.2 million in 2022, a 14.8% decrease from 2021 due mostly to broad-based stock market declines.
However, CEO compensation has increased 1,209.2% since 1978, compared with a 15.3% increase in a typical worker's compensation. In 2022, CEOs were paid 344 times as much as a typical worker. In 1965, they were paid 21 times as much.
CEO compensation has even been breaking away from that of other very highly paid workers. CEO compensation in 2021 was nearly eight times as much as the top 0.1% of wage earners.
"Rising CEO pay does not reflect greater skills or contributions to firms' productivity. What has changed over the years is CEOs' use of their power to set their own pay," says Jori Kandra, EPI research assistant and co-author of the report.
"Exorbitant CEO pay . . . has contributed to rising inequality," says co-author Josh Bivens, chief economist at EPI. "Escalating CEO pay in recent decades has spilled over to fuel wage growth at the top of the wage scale more generally, and this has left fewer gains for ordinary workers."
From Economic Policy Institute
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