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News from EPI CEOs made 231 times more than workers did in 2011

For Immediate Release: Wednesday, May 2, 2012
Contact: Phoebe Silag or Karen Conner, 202-775-8810

CEOs made 231 times more than workers did in 2011

CEOs were paid, on average, 231 times more than workers in 2011, a new EPI analysis shows. This CEO-to-worker compensation ratio includes the value of stock options exercised by executives. An alternative measure of CEO compensation that includes the value of stock options granted in a given year yields a CEO-to-worker compensation ratio of 209.4-to-1. By comparison, the CEO-to-worker compensation ratio was roughly 20-to-1 in 1965.

In CEO pay and the top 1%: How executive compensation and financial-sector pay have fueled income inequality, EPI President Lawrence Mishel and research assistant Natalie Sabadish find that CEO compensation has grown exponentially in recent decades, while worker compensation has been relatively stagnant: from 1978 to 2011, CEO compensation increased more than 725 percent, compared to an increase in compensation for workers of only 5.7 percent.

CEOs’ growing compensation, along with compensation for highly-paid workers in the financial sector, has been the primary driver of the more than doubling of the income share of the top 1 percent over the past three decades. Executives and workers in finance accounted for 58 percent of the expansion of income for the top 1 percent from 1979 to 2005. They accounted for 67 percent of the increase in income for the top 0.1 percent over the same time period.

“CEOs have fared far better than the typical worker, the stock market and the U.S. economy as a whole since the late-1970s,” Mishel said. “Compensation growth for executives and for top-tier financial-sector workers has fueled the enormous growth of incomes at the top.”

CEO pay and the top 1% presents a preview of data from the 12th edition of “The State of Working America.” It is based on a new analysis of CEO compensation data that develops consistent measures establishing trends back to 1965. The CEO compensation series is based on salary, bonus, restricted stock grants, options exercised and long-term incentive payouts for CEOs at the top 350 firms, ranked by sales, with stock options measured as either “realized” or “granted.” Annual worker compensation is measured as the wages and benefits of a full-time, full-year production and nonsupervisory worker in a firm’s key industry. A methodological appendix provides details on measurement issues and benchmarks to other studies.

EPI will release “The State of Working America, 12th Edition,” in August. Contact for an advance copy.

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