A new analysis released Tuesday by the Economic Policy Institute finds that CEO pay in the United States rose by a staggering 1,322% between 1978 and 2020—a sharp contrast to the pay increase of the typical worker, which was just 18% during that same period.\r\n\r\n\u0022Exorbitant CEO pay is a major contributor to rising inequality that we could safely do away with.\u0022\r\n—Lawrence Mishel and Jori Kandra, Economic Policy Institute\r\n\r\nIn 2020, a year of pandemic and widespread economic dislocation, the top executives at the largest public firms in the U.S. were paid 351 times as much as the typical worker, with CEO pay measured by salary, bonuses, long-term incentive payouts, and exercised stock options. According to Bloomberg, Tesla\u0026#039;s billionaire CEO Elon Musk was the highest-paid corporate executive in the U.S. in 2020.\r\n\r\nHighlighting the extent to which inequality has soared in recent decades, EPI observes in its report that the CEO-to-worker-pay ratio was 61-to-1 in 1989. All of the earnings figures in EPI\u0026#039;s report are adjusted for inflation.\r\n\r\nCEOs saw their compensation increase by 18.9% between 2019 and 2020 while the pay of typical workers—those who were able to hold on to their jobs amid mass layoffs stemming from the pandemic—rose just 3.9% over that time, EPI shows.\r\n\r\n\u0022Even that wage growth is overstated,\u0022 notes EPI, which has been tracking and documenting executive pay trends for years. \u0022Perversely, high job loss among low-wage workers skewed the average wage higher.\u0022\r\n\r\nAuthored by EPI distinguished fellow Lawrence Mishel and research assistant Jori Kandra, the new report argues that \u0022exorbitant CEO pay is a major contributor to rising inequality that we could safely do away with.\u0022 In 2020, EPI finds, a CEO at one of the top 350 public companies in the U.S. was paid $24.2 million on average.\r\n\r\n\u0022CEOs are getting more because of their power to set pay and because so much of their pay (more than 80%) is stock-related, not because they are increasing their productivity or possess specific, high-demand skills,\u0022 Mishel and Kandra write. \u0022This escalation of CEO compensation, and of executive compensation more generally, has fueled the growth of top 1.0% and top 0.1% incomes, leaving less of the fruits of economic growth for ordinary workers and widening the gap between very high earners and the bottom 90%. The economy would suffer no harm if CEOs were paid less (or were taxed more).\u0022\r\n\r\nOther recent research has similarly called attention to the growing disconnect between CEO compensation and measures such as company performance, particularly during the Covid-19 pandemic.\r\n\r\nIn May, the Institute for Policy Studies found that 51 of the nation\u0026#039;s 100 biggest low-wage employers—including Coca-Cola, Chipotle, Tyson Foods, and YUM Brands—altered their own compensation rules to grant top executives massive pay packages as their workers struggled to get by on paltry wages.\r\n\r\n\u0022Common manipulations included lowering performance bars to help executives meet bonus targets, awarding special \u0026#039;retention\u0026#039; bonuses, excluding poor second-quarter results from evaluations, and replacing performance-based pay with time-based awards,\u0022 the report showed. \u0022Companies enlisted an army of \u0026#039;independent\u0026#039; compensation consultants in an effort to give all this rule-rigging a veneer of legitimacy.\u0022\r\n\r\nIn its new analysis, EPI points out that the 1,322% CEO pay jump between 1978 and 2020 far outstripped the 817% growth in the S\u0026amp;P stock market during that same period. The dramatic increase in executive pay has also significantly outpaced the 341% earnings growth of the top 0.1% overall since 1978.\r\n\r\nRefuting the notion that skyrocketing executive pay is merely a reflection of \u0022the market for skills\u0022 or \u0022talent,\u0022 Mishel and Kandra write that \u0022CEO compensation grew far faster than compensation of very highly paid workers over the last few decades, which suggests that the market for skills was not responsible for the rapid growth of CEO compensation.\u0022\r\n\r\nTo reverse the decades-long trend of soaring CEO pay—which EPI argues is damaging to workers and the broader economy—the report suggests several potential policy solutions, including imposing higher marginal income tax rates on top earners and setting higher corporate tax rates for companies with high ratios of executive-to-worker compensation.\r\n\r\nIn March, Sen. Bernie Sanders (I-Vt.) introduced legislation that would raise the corporate tax rate by 0.5% for companies that report a CEO-to-median-worker pay ratio of 50-to-1. The tax increase would grow to 5% for companies reporting a ratio of 500-to-1 or higher.\r\n\r\n\u0022At a time of massive income and wealth inequality, the American people are demanding that large, profitable corporations pay their fair share of taxes and treat their employees with the dignity and respect they deserve,\u0022 Sanders said upon introducing his bill, which has gone nowhere in the Senate.\r\n\r\nThis article has been updated to clarify that the earnings figures in EPI\u0026#039;s report are adjusted for inflation.