Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Corporate gatekeepers and big tech monopolists are making it more difficult than ever for independent media to survive. Please chip in today.

A demonstrator holds a "Tax the Rich" sign during a protest in New York on June 27, 2020. (Photo: Erik McGregor/LightRocket via Getty Images)

As Wages Stagnate and Executive Pay 'Continues to Balloon,' Report Shows Top CEOs Now Make 320 Times More Than Typical Worker

New research from the Economic Policy Institute finds that CEO compensation grew by 1,167% from 1978 to 2019, "far outstripping" the growth of the stock market.

Jake Johnson

New research published Tuesday by the Economic Policy Institute shows that the top executives at the largest corporations in the United States now make 320 times more than what their typical employees earn in wages and benefits.

"CEO pay can be curbed to reduce the growing gap between the highest earners and everyone else with little, if any, impact on the output of the economy or firm performance."
—Jori Kandra, Economic Policy Institute

EPI's latest annual analysis of executive compensation finds that the CEOs of the top 350 firms in the U.S. raked in an average of $21.3 million in 2019, a 14% increase from 2018. The 320-1 ratio of CEO-to-worker pay in 2019 is more than five times higher than the 61-1 ratio reported in 1989.

The think tank's research comes amid a global pandemic that is likely to exacerbate the decades-long trend of surging income and wealth inequality in the U.S.—a trend that, according to EPI, won't be reversed by CEOs opting to take salary cuts during a public health crisis that has left tens of millions of Americans jobless.

EPI's new report shows that CEO compensation grew by 1,167% from 1978 to 2019, "far outstripping" the growth of the stock market.

"CEOs who volunteer to take salary cuts aren't giving up a lot given how much of their pay comes from stock awards and options," EPI said.

Lawrence Mishel, a distinguished fellow at EPI and co-author of the new report, said in a statement that "while wage growth for the majority of Americans has remained relatively stagnant for decades, CEO compensation continues to balloon."

"This has fueled the spectacular income growth of the top 0.1% and 1.0% and the growth of income inequality overall," said Mishel, who told the Washington Post that CEO pay could rise again in 2020 despite the nationwide economic collapse caused by the Covid-19 crisis.

"CEOs offering salary cuts during the coronavirus pandemic yield press releases," Mishel added, "but no real progress toward reducing inequality and raising workers' wages."

As a substantive alternative to CEO public relations stunts, EPI proposed several policy changes that would significantly reduce the yawning gap between CEO compensation and typical worker pay:

  • Reinstating higher marginal income tax rates at the very top of the income ladder;
  • Setting corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation;
  • Capping compensation and tax anything over the cap; and
  • Allowing greater use of "say on pay," which allows a firm's shareholders to vote on top executives' compensation.

Jori Kandra, research assistant at EPI and co-author of the new report, said the "huge growth in CEO pay" over the past four decades "is not a reflection of the market for talent."

"We know this because CEO compensation has grown more than three times faster than the growth of earnings for the top 0.1% of earners, which was 337% over the same period," said Kandra. "This means that CEO pay can be curbed to reduce the growing gap between the highest earners and everyone else with little, if any, impact on the output of the economy or firm performance."

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

We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

Senators Set to Leave Town for 10-Day Recess Without Action on Gun Violence Crisis

"How many more children, mothers, and fathers need to be murdered in cold blood before the Senate has the guts to ban assault weapons and take on the NRA?" asked Sen. Bernie Sanders.

Jake Johnson ·

Scientists to BlackRock Vice Chairman: New Fossil Fuel Development 'Incompatible' With 1.5°C

"The only responsible course of action is to do everything in our power to stop fossil fuel expansion and further emissions."

Jessica Corbett ·

Goldman Prize Awarded to Activists Who Showed Nature's 'Amazing Capability to Regenerate'

"While the many challenges before us can feel daunting, and at times make us lose faith, these seven leaders give us a reason for hope and remind us what can be accomplished in the face of adversity."

Julia Conley ·

Faith Leaders Call for Federal Election Monitors in Georgia to Protect Black Voters

"It is imperative that our election this November is monitored to preserve ballot integrity and ensure ballot security."

Brett Wilkins ·

'Inaction Is Bought': Here Are the Receipts on NRA's Purchase of GOP

"The issue is money in politics," said Nina Turner after the nation's latest mass killing of students and teachers. Right-wing lawmakers are "allowing children to die because of the gun lobby."

Kenny Stancil ·

Common Dreams Logo