Even with the ongoing COVID-19 pandemic, a new report from the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) reveals that CEO salaries continue to soar while compensation for the people working for these individuals remains stagnant.
Moira Ritter of CNN Business has reported that “the average S&P 500 company CEO made 299 times the average worker’s salary last year.”
“[Executives] received $15.5 million in total compensation on average, marking an increase of more than $260,000 per year over the past decade,” Ritter reported. “At the same time, the average production and nonsupervisory worker in 2020 earned $43,512, up just $957 a year over the past decade.”
And even as the country struggled with COVID-19 closures and restrictions, the AFL-CIO report revealed these numbers continued to increase with an average total CEO compensation soaring by more than $700,000 and CEO-to-worker pay ratios increasing from 264:1 in 2019.
In a press conference announcing the findings from the study, AFL-CIO secretary-treasurer Liz Shuler said, “this is consistent with what we’ve seen year to year: inequality, the imbalance in our economy. [It’s] clear by this report that the pay of CEOs and working people continues to be a major problem in this country.”
According to the AFL-CIO survey, the most highly compensated CEO in 2020 was Chad Richison of the payroll company Paycom, who received more than $200 million in salary and vesting stock awards.
“The most skewed pay scale belonged to Aptiv, which had a 5,294:1 CEO-to-worker pay ratio last year,” Ritter reported. “While the company’s CEO, Kevin Clark, was compensated with more than $31 million in 2020, its median employee pay was $5,906.”
Another key takeaway from the AFL-CIO report was that salaries for CEOs and workers continue to grow at vastly different rates.
“On average, CEOs of S&P 500 companies saw their total compensation grow 5% in 2020 while the disclosed median employee pay grew only 1% at those same companies,” Ritter reported.
Pointing out the disturbing disparity between incomes for these two groups, Shuler also called out the number of executives who claimed they would be taking a pay cut or giving up their salary altogether last year because of the pandemic and then reneging despite the U.S. reaching unheard levels of unemployment among the general public.
“The only reason we’re reaching the other side of the COVID-19 pandemic is because working people stepped up,” Shuler said. “We hear so 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 hum.”
One possible reason for the disparity? According to Ritter, although there was a slight decrease in CEO base pay throughout 2020, there was an increase in equity compensation such as stock-based pay, amounting to over $1 million.
“For example, while the average CEO salary at S&P 500 companies was a little more than $1 million, performance-based compensation accounted for an additional $14 million, bringing the average total compensation to more than $15 million last year,” Ritter reported.