Source: AFL-CIO, 2019
In 2018, CEOs of S&P 500 companies received, on average, $14.5 million in total compensation. The average S&P 500 company CEO-to-worker pay ratio was 287 to 1. The imbalance in our economy between the pay of CEOs and working people continues to be a problem.
CEO pay continues to outpace the pay of working people. In the past 10 years, CEO pay at S&P 500 companies increased more than $500,000 a year to an average of $14.5 million in 2018. Meanwhile, the average production and nonsupervisory worker saw a wage increase of $785 a year, earning on average just $39,888 in 2018.
Company Pay Ratios
Publicly traded companies are required to disclose the pay ratio between their chief executive and median employee. Company pay ratio data is important. It shows which companies are investing in their workforce to create high-wage jobs. The table below shows how companies pay their CEOs relative to their workforce.
CEOs made 287 times more money last year than their workers did
Source: Alexia Fernández Campbell, Vox, June 26, 2019
Companies have finally started reporting CEO-worker pay ratios. Now we know why they fought so hard to avoid it.
Unsurprisingly, the gap is obscene. The average chief executive of an S&P 500 company earned 287 times more than their median employee last year, according to an analysis of the new federal data released Tuesday by the AFL-CIO labor federation. America’s CEOs earned a staggering $14.5 million in 2018, on average, compared to the average $39,888 that rank-and-file workers made. And CEOs got a $500,000 bump compared to the previous year, while the average US worker barely got more than $1,000. ….
…. But there is another Reagan-era policy that has contributed to skyrocketing CEO pay: stock buybacks. Corporate executives have spent trillions of dollars buying back their company’s own stocks since the 1980s to temporarily boost its value. …. Over the past 15 years or so, firms have spent an estimated 94 percent of corporate profits on buybacks and dividends. That means companies are barely investing any of their profits in their companies, or workers. Which is why we end up with charts that look like this. ….