Between 1978 and 2021, according to new research from the Economic Policy Institute (EPI), CEO compensation at the 350 largest publicly traded U.S. companies rose by an inflation-adjusted 1,460%, far outstripping the 18.1% pay increase that the nation’s typical worker saw during that period.
The trend of soaring CEO pay has continued during the coronavirus pandemic, which caused mass economic chaos and job loss among ordinary workers. EPI found that “while millions lost jobs in the first year of the pandemic and suffered real wage declines due to inflation in the second year, CEOs’ realized compensation jumped 30.3% between 2019 and 2021.”
“Typical worker compensation among those who remained employed rose 3.9% over the same time span,” note EPI’s Josh Bivens and Jori Kandra, the authors of the new report.
Bivens and Kandra write in their new analysis that the chief executive pay surge in recent decades is not the “result of a competitive market for talent but rather reflect[s] the power of CEOs to extract concessions.”
In 2021, the CEOs of top U.S. companies raked in nearly 400 times more pay than the typical worker.
“Some observers argue that exorbitant CEO compensation is merely a symbolic issue, with no consequences for the vast majority of workers,” Bivens and Kandra note. “However, the escalation of CEO compensation, and of executive compensation more generally, has fueled the growth of top 1% and top 0.1% incomes, generating widespread inequality.”
Bivens and Kandra write in their new analysis that the chief executive pay surge in recent decades is not the “result of a competitive market for talent but rather reflect[s] the power of CEOs to extract concessions.”
In 2021, the CEOs of top U.S. companies raked in nearly 400 times more pay than the typical worker.
“Some observers argue that exorbitant CEO compensation is merely a symbolic issue, with no consequences for the vast majority of workers,” Bivens and Kandra note. “However, the escalation of CEO compensation, and of executive compensation more generally, has fueled the growth of top 1% and top 0.1% incomes, generating widespread inequality.”
“Another option,” Bivens and Kandra write, “is to set corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation,” an idea proposed by Sen. Bernie Sanders (I-Vt.) in his 2021 Tax Excessive CEO Pay Act.