CEO Pay Growth Has Wildly Outpaced The Average Worker

In 2018, the CEOs running the top 350 companies in the U.S. made $17.2 million each on average - 278 times the salary of their average worker. The figures come as part of an analysis from the Economic Policy Institute (EPI) which found that CEO pay grew nearly 1,000 percent in the U.S. since 1978 while average compensation for private sector workers only went up by just under 12 percent. While the CEO-to-typical-worker compensation ratio stood at 278-to-1 in 2018 when realized stock options were included, it was 20-to-1 in 1965 and 58-to-1 in 1989.

The report states that exorbitant CEO pay is fuelling rising inequality, increasing the gap between the top 1 percent of very high earners and the bottom 90 percent. Most CEOs do not earn their huge paychecks through increased productivity or due to specific or demand skills. They are rather able to pocket large sums of money due to their own power to set pay levels. The analysis adds that if CEO compensation was reduced or taxed more heavily, it would not have any economic impact.