Amazon to increase salary to 500,000 employees 1:02
(CNN Business) -
The difference between CEO salary and average employee salary grew in 2020 despite the covid pandemic and existing aid stimuli.
The average CEO of S&P 500 companies earned 299 times the salary of the average worker last year, according to the AFL-CIO's annual Executive Paywatch report.
Executives received total compensation of $ 15.5 million on average, an increase of more than $ 260,000 annually in the last decade.
At the same time, the average production and unsupervised worker in 2020 earned $ 43,512, an increase of just $ 957 a year over the past decade.
Both the average compensation and the salary ratio grew in 2020 during the pandemic.
Average total compensation for executives increased more than $ 700,000 last year, while CEOs' pay ratios to workers increased by a ratio of 264: 1 in 2019.
"This is consistent with what we have observed year after year," Liz Schuler, AFL-CIO secretary-treasurer, said at a news conference with reporters on Wednesday.
"The inequality, the imbalance in our economy, it is clear from this report that CEO and worker compensation continues to be a big problem in this country."
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The highest-paid CEO in 2020 was Paycom's Chad Richison, who received more than $ 200 million in salary and shares released over time.
Other companies with executives topping the list of the highest-paid CEOs include General Electric, Regeneron Pharmaceuticals, Hilton, T-Mobile, Nike, Microsoft and Netflix.
The most skewed pay scale belongs to Aptiv, which had a 5,294: 1 ratio between its CEO's salary and workers last year.
While the company's CEO, Kevin Clark, was paid more than $ 31 million in 2020, the average salary for his employees was $ 5,906.
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Other companies topping that list are The Gap, Paycom, Chipotle, Nike, and Coca-Cola.
Firms in the selective consumer industry, including retailers like Amazon, had the largest disparity with an average 741: 1 CEO-to-worker ratio.
"The only reason we managed to get to the other side of the covid-19 pandemic is because working people stepped forward," Schuler said.
"We hear many business leaders calling these workers essential and calling them heroes, but words are not enough. We have always been essential, doing the critical work to make this country work."
An ongoing conversation
The difference between executive compensation and that of other workers in large companies has attracted growing interest since the 2008 recession, when federal authorities forced companies to make such data public.
At the beginning of last year's coronavirus pandemic, many CEOs and top executives announced that they would be cutting or resigning their pay.
In large companies, the move to give up part of the pay was not enough to generate drastic improvements for the lowest paid employees or to compensate for the losses from the pandemic, but it was symbolic and necessary to show workers that executives are also they were affected by the crisis.
However, giving up pay would not have meant great losses for executives either.
Base salary is only a fraction of an executive's total compensation, which is typically made up of performance-based compensation such as stocks, stock options, and bonuses.
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Despite a slight decline in base compensation for CEOs, CEOs enjoyed increases in their equity compensation, especially share-based compensation, which increased more than $ 1 million last year.
For example, while the average salary for CEOs of S&P 500 companies was just over $ 1 million, performance-based compensation represented an additional $ 14 million, bringing average total compensation to more than $ 1 million. 15 million last year.
On average, CEOs of S&P 500 companies saw their total compensation grow by 5% in 2020, while the average disclosed salary of employees grew just 1% in those same companies.
The context
The growing gap between CEO and worker pay comes after a year of economic turmoil and amid a recovering economy.
The US economy added 850,000 jobs in June, the highest growth since August
Last month, the US economy added 850,000 jobs, a number that beat expectations and signaled that job growth is accelerating.
Even so, the labor market has lost 6.8 million jobs since February 2020, and 6.2 million people did not work or worked less because their company was affected by the pandemic, according to the report.
Unemployment rates by demographic groups also show that the economic hardships of the pandemic continue to fall largely on low-income and non-white workers.
At the same time, the United States faces record inflation.
The consumer price index, a key measure of inflation, rose 0.9% in June, the biggest increase in a month in 13 years.
In the past year, prices rose 5.4%, the biggest jump in annual inflation in nearly 13 years.
This trend is affecting consumers, who are struggling to keep up with rising prices, especially those for gasoline and food.
And, like job growth and inflation, the stock market is hitting all-time highs too.
Wall Street's biggest banks are reporting multi-million dollar profits and a number of high-profile companies have already made their debut on the stock market this year.
CEO Salary
