Since 1978, CEO Pay Has Grown 940.3% While Average Worker Pay Is Up Just 11.9%

The gap between compensation for America’s corporate leaders and the workers they employ has grown exponentially in the past few decades, according to a report from the Economic Policy Institute.

CEO pay has risen 940 percent since 1978, while over the same period, the average worker has seen a mere 12 percent increase in pay.

“CEOs are getting more because of their power to set pay, not because they are increasing productivity or possess specific, high-demand skills,” wrote economist Lawrence Mishel and research assistant Julia Wolfe.

CBS News noted that the report shows average CEO pay at the country’s largest 350 companies was $17.2 million last year. For every $1 earned by the average worker, CEOs got $278.

For comparison, in 1965, the nation’s top CEOs earned $20 for every dollar earned by a worker. In 1989, those numbers became 58-to-1.

What fueled this dramatic increase?

According to Mishel and Wolfe, the rise is “due to a shift in the 1990s and 2000s to compensate CEOs mostly with stock options, restricted shares and other incentive-based pay fueled a spike in their earnings.”

The EPI report suggested remedies to address the ever-growing income gap that include “reinstating higher marginal income tax rates at the very top and setting higher corporate tax rates on companies with higher ratios of CEO-to-worker compensation.”

Read the full report.





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