Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Today is the LAST DAY of this Mid-Year Campaign. This is our hour of need.
If you value independent journalism, please support Common Dreams.

TODAY is the last day to meet our goal -- Join the small group of generous readers who donate, keeping Common Dreams free for millions of people each year.

CEOs of the top companies in the U.S., like Amazon executive Jeff Bezos, took home salaries that were 278 times the size of their employees' compensation last year. (Photo: David Ryder/Scott Olson/Getty Images)

Now Earning 278 Times More Than Average Worker, New Study Shows CEO Pay Has Grown More Than 1,000% Since 1978

"Corporate greed is eviscerating the working class."

Julia Conley

As even some of the wealthiest Americans have begun to call for major reforms to the U.S. economic system to narrow the wealth gap, a new study released Wednesday revealed that over the past four decades, salaries for the top executives in the U.S. have gone up by more than 1,000 percent.

CEOs at the 350 largest companies now take home salaries that are 278 times higher than those of the average worker, according to the new Economic Policy Institute (EPI) analysis.

With an average compensation of $17.2 million per year, report co-author Lawrence Mishel said Wednesday, today's CEOs would barely notice a change in their quality of life if their salaries were slashed.

"You could cut CEO pay in half and the economy would not be any different," Mishel, a distinguished fellow at EPI, told The Guardian.

EPI's findings about CEO compensation were denounced as "obscene" by critics of the current economic system, under which 40 percent of American workers struggle to find $400 in their budget to cover an emergency expense while the heads of powerful companies are given huge tax breaks on top of their salaries.

The study represents "an obscene concentration of profit at the top levels of companies," tweeted journalist Heidi Moore. "Workers should be able to share in the value."

"Corporate greed is eviscerating the working class," tweeted the consumer advocacy watchdog Public Citizen.

While CEO pay has gone up exponentially since 1978, the average worker makes only about 11 percent more than they would have in the same job 40 years ago, when adjusting for inflation.

EPI pointed out that CEOs frequently attempt to justify their exorbitant salaries and bonuses by pointing to their companies' growing stock market performance. The country's biggest firms saw their stock prices going up by more than 700 percent in the last four decades—but workers who are responsible for the day-to-day operations of those same companies see little benefit from the growth that they contribute to each day.

"The generally tight link between stock prices and CEO compensation indicates that CEO pay is not being established by a 'market for talent,' as pay surged with the overall rise in profits and stocks, not with the better performance of a CEO’s particular firm relative to that firm's competitors," wrote Mishel and co-author Julia Wolfe. "As profits and stock market prices have reached record highs, the wages of most workers have grown very little."

CEO pay did not slow down after the recession of 2009, with executives' salaries growing by more than 52 percent during the recovery from the economic crash brought on largely by powerful, unregulated banks. But workers' salaries have gone up by just 5.3 percent over the same period, with average wages sometimes falling from year to year.

Mishel and Wolfe note in their study that concern over the high salaries of CEOs is rooted in the knowledge of how the rest of the country is struggling to pay for medical care, housing, and falling deep into debt while the wealthiest Americans reap the rewards of workers' labor.

"Some observers argue that exorbitant CEO compensation is merely a symbolic issue, with no consequences for the vast majority of workers," the report reads. "However, the escalation of CEO compensation, and of executive compensation more generally, has fueled the growth of top 1.0 percent and top 0.1 percent incomes, generating widespread inequality."

To narrow the wealth gap, EPI recommends implementing far higher income tax rates for the richest Americans and greater representation for workers on company boards.


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

TODAY is the last day of our crucial Mid-Year Campaign and we might not make it without your help.
Who funds our independent journalism? Readers like you who believe in our mission: To inform. To inspire. To ignite change for the common good. No corporate advertisers. No billionaire founder. Our non-partisan, nonprofit media model has only one source of revenue: The people who read and value this work and our mission. That's it.
And the model is simple: If everyone just gives whatever amount they can afford and think is reasonable—$3, $9, $29, or more—we can continue. If not enough do, we go dark.

All the small gifts add up to something otherwise impossible. Please join us today. Donate to Common Dreams. This is crunch time. We need you now.

Biden Urged to Embrace Windfall Tax as Exxon Says Profits Doubled in Second Quarter

"It's time for the president to demand that Congress pass a windfall profits tax on Big Oil and use the revenue to provide rebates to consumers NOW!" wrote Sen. Bernie Sanders.

Jake Johnson ·


Texas Supreme Court Allows Century-Old Abortion Ban to Take Effect

"Extremist politicians are on a crusade to force Texans into pregnancy and childbirth against their will, no matter how devastating the consequences."

Jake Johnson ·


'What's There to Even Discuss?' Omar Says Free, Universal School Meals Should Be Permanent

"We have an opportunity to prove that a government of the people, by the people, and for the people can still deliver big things. And we can feed tens of millions of hungry kids while we do it."

Jake Johnson ·


'Stark Betrayal': Biden Administration Floats New Offshore Oil and Gas Drilling

"This is the third time since November the Biden administration has announced new oil and gas leasing plans on the Friday before a holiday," said one climate advocate. "They're ashamed, and they should be."

Jake Johnson ·


As US Rolls Back Reproductive Rights, Sierra Leone Moves to Decriminalize Abortion

"I'm hopeful today's announcement gives activists in the U.S., and especially Black women given the shared history, a restored faith that change is possible and progress can be made."

Brett Wilkins ·

Common Dreams Logo