The top executives at large US companies are paid 278 times more than their company’s workers and the gap continues to widen, a study published on Wednesday showed.
Average CEO compensation at the 350 largest US firms last year was US$17.2 million a year, including stock options, which generally account for two-thirds of their pay packages, the study by the Economic Policy Institute (EPI) said.
The gap between CEO and workers has soared from 58-to-1 in 1989 and 20-to-1 in 1965, according to EPI, a nonpartisan think tank that focuses on issues facing low and middle-income workers.
From 1978 to last year, CEO compensation increased by more than 1,000 percent — with increasingly rich stock awards — while worker pay rose just under 12 percent.
“This escalation of CEO compensation, and of executive compensation more generally, has fueled the growth of top 1.0 percent and top 0.1 percent incomes, leaving less of the fruits of economic growth for ordinary workers and widening the gap between very high earners and the bottom 90 percent,” the study said.
“The economy would suffer no harm if CEOs were paid less [or taxed more],” it said.
Pay inflation “does not reflect rising value of skills, but rather CEOs’ use of their power to set their own pay,” it said.
“And this growing power at the top has been driving the growth of inequality in our country,” it added.