Detailing the widening gap between outrageously high CEO compensation and the median wages of employees at some of the world's largest and most profitable companies, a progressive think tank on Thursday warned executives will continue to enrich themselves at the expense of their lowest-paid workers unless policies are adopted to curb such corporate greed.
"Across the political spectrum, Americans are fed up with overpaid CEOs," said Sarah Anderson, program director at the Institute for Policy Studies (IPS) and author of a new report out Thursday. "Policymakers should take long overdue action to push Corporate America in a more equitable direction."
The report, Executive Excess 2025, finds that absent federal policies forcing corporations to rein in their spending on stock buybacks and exorbitant CEO pay packages, the average CEO-to-worker pay gap widened by 12.9% last year at what IPS calls the "Low-Wage 100"—the 100 S&P 500 companies with the lowest median worker pay.
The average gap between executive and worker pay now stands at 632-to-1 at these firms, up from 560-to-1 in 2023.
Between 2019-24, the average CEO at a Low-Wage 100 company saw their pay rise 34.7%, unadjusted for inflation, while the average median worker pay rose just 16.3%.
CEO compensation increased by 22.6% over the time period, far outpacing inflation. Meanwhile, wage hikes by these same companies didn't even match inflation, including for warehouse workers at software company Aptiv, where the CEO-to-worker pay gap was 2,072-to-1 last year, or cashiers at Ross Stores, where the gap was 1,770-to-1.
"We can curb this runaway source of inequality by taxing corporate greed."
Aptiv CEO Kevin Clark was paid $18.8 million last year while the median worker at the firm made just $9,052. Ross Stores' pay ratio was similar, with CEO Barbara Rentler taking home $17 million compared to the company's median worker, who made just $9,602.
Starbucks, which has made headlines in recent years both for its store employees' fight to unionize across the United States and for its executives' illegal union-busting tactics, had far-and-away the largest gap between CEO and median worker pay in 2024, with CEO Brian Niccol taking home $95.8 million and the median employee earning just $14,674.
That makes the wage gap 6,666-to-1 at the coffee chain.
A petition organized last year by Starbucks Workers United, which has unionized at hundreds of stores since a landmark victory in Buffalo, New York in 2021, warned Niccol that the cost of living across the US "is skyrocketing while you continue to make millions" and the employees "who actually make your Starbucks run can't make ends meet."
IPS said the petition reflected its report's main finding: "At a time when many American workers are struggling with high costs for groceries and housing, the nation's largest low-wage employers are fixated on making their overpaid CEOs even richer."
Contributing to the growing wage gap at the Low-Wage 100 is the companies' focus on stock buybacks, in which firms buy back their own shares to "artificially inflate executive stock-based pay and siphon resources out of worker wages and productive long-term investments."
The 100 companies spent $644 billion on stock buybacks from 2019-24, according to IPS, with home improvement giant Lowe's ranking as the "stock buy back leader," spending $46.6 billion buying its own shares over the past six years.
"That sum could've instead covered the cost of giving each of the firm's 273,000 global employees an annual $28,456 bonus for six years," reads the report. "In 2024, Lowe's CEO Marvin Ellison enjoyed total compensation of $20.2 million, which is 659 times the retailer's $30,606 median annual worker pay."
Anderson said the report highlights "how America's largest low-wage employers are funneling profits into their CEOs' pockets—at the expense of both their workers and their companies' long-term growth."
IPS pointed to "three particularly promising areas for CEO pay policy reform," including:
- Subjecting corporations to higher tax levies if they have excessive levels of CEO pay;
- Taxing and restricting stock buybacks; and
- Using federal contracts and subsidies to discourage wide corporate pay gaps.
Congress should pass the Curtailing Executive Overcompensation (CEO) Act, which would apply an excise tax to companies with CEO-to-worker pay ratios exceeding 50-to-1, or the Tax Excessive CEO Pay Act, said the group.
"A May 2024 survey suggests that such taxes would be enormously popular," reads the report. "Overall, 80% of likely voters favor a tax hike on corporations that pay their CEOs over 50 or more times more than what they pay their median employees. Large majorities in every political group support this approach: some 89% of Democrats, 77% of independents, and 71% of Republicans. In swing states, 83% of likely voters give this proposal a thumbs up."
Other legislation, the Stock Buyback Accountability Act, would quadruple the 1% federal excise tax currently in effect for stock buybacks, and would have raised $6.3 billion from the Low-Wage 100 if it had been in effect in 2023 and 2024—enough to cover the cost of 327,218 public housing units each year for two years.
"We can curb this runaway source of inequality," said IPS, "by taxing corporate greed."
