NEW YORK – After two uncharacteristic years of decline in 2022 and 2023, CEO pay surged in 2024 and remained enormous compared with the pay of other workers, according to a new data tool on CEO pay provided by the Economic Policy Institute.
CEO Pay Surges Again After Two-Year Decline
Average realized CEO compensation—including stock awards and options—at the top 350 U.S. firms was $22.98 million in 2024, a 5.9% increase from 2023.
From 1978–2024, top CEO compensation skyrocketed 1,094%, compared with a 26% increase in a typical worker’s compensation. In 2024, CEOs were paid 281 times as much as a typical worker—in contrast to 1965, when they were paid 21 times as much as a typical worker.
High CEO Compensation Isn’t Linked to Performance
CEO pay remains excessive, even when compared to other highly privileged earners. In 2023, CEOs made 7.5 times more than the top 0.1% of workers. This sharp gap indicates that their compensation is not tied to exceptional skill or higher productivity. Instead, CEOs often use their influence to sway corporate boards and secure higher pay. If companies reduced CEO salaries, it would not harm productivity or economic output.
Lawmakers Push Back Against Extreme Executive Pay
Stratospheric CEO pay levels have attracted the attention of policymakers looking to rein them in, like the Tax Excessive CEO Pay Act introduced last week by Senator Bernie Sanders and Representative Rashida Tlaib. Previous EPI work has outlined several policy solutions that could limit CEOs’ ability to attain increasingly higher pay, including changes to tax policy as well as reforms to antitrust enforcement, labor policy, and corporate governance rules that could provide countervailing power against CEOs’ ability to effectively set their own pay levels.
“CEOs do not work 281 times harder than the typical worker. Instead, they simply hold the power to set their own pay. The labor market for corporate executives is highly dysfunctional, and it fails to impose any real discipline on excessive compensation. Therefore, we need policies that restrict CEOs from extracting unreasonable pay. These reforms are crucial to ending the winner-take-all culture that dominates economic life in the U.S.,” said Josh Bivens, EPI chief economist.
Final Thoughts:
The surge in CEO pay clearly highlights a widening gap between corporate leadership and everyday workers. While executive compensation continues to soar, average employees are still seeing only modest gains.
If you’re interested in more insights on economic trends, labor policy, and corporate accountability, explore our latest articles.
FAQs:
1. Why has CEO pay grown so much faster than worker wages?
CEO compensation is often tied to stock performance and shareholder returns, which can multiply earnings quickly. Meanwhile, worker wages are typically influenced by slower-moving labor policies and company pay structures.
2. Would reducing CEO pay hurt company performance?
Most experts, including economists at the Economic Policy Institute, say no. High CEO pay is often driven by bargaining power, not productivity. Lowering it wouldn’t reduce output—it would simply redistribute corporate gains more fairly.
