Topline
Chief executives at S&P 500 companies made 324 times more than the median workers at their companies in 2021 on average, according to an annual report from the U.S.’ largest labor union federation AFL-CIO released Monday morning, as the gap between compensation of top executives and workers continues to widen.
Apple CEO Tim Cook netted nearly $100 million in total compensation last year.
Key Facts
The CEO-to-worker pay ratio is the largest since AFL-CIO began tracking the metric in 2018 and up from 299-to-1 in 2020.
The highest compensated CEO in 2021 was Expedia CEO Peter Kern at $296.2 million, followed by Amazon CEO Andy Jassy ($212.7 million), Intel CEO Patrick Gelsinger ($178.6 million), ServiceNow CEO William McDermott ($165.8 million) and Apple CEO Tim Cook (98.7 million).
Jassy’s total 2021 compensation was 6,474 times more than Amazon’s median worker, the highest ratio of any executive, according to the study.
An Amazon spokesperson said in a statement to Forbes Jassy’s $212.7 million payday appears inflated due to how the SEC requires companies to report compensation, and most of that number comes from stock awards that vest over a 10-year period, representing “most of Andy’s compensation for the coming years.”
Others near the top of AFL-CIO’s list similarly were largely compensated with long-term restricted stock awards, including Cook, who received $83 million worth of vested stock in his company last year.
Key Background
CEO pay has skyrocketed in recent decades: CEO compensation rose 1,322.2% from 1978 to 2020 adjusted for inflation, compared to an 18% increase in worker compensation, according to an Economic Policy Institute analysis released last year. The Covid-19 pandemic accelerated the gap in compensation, a New York Times study conducted by Equilar last June revealed. The Times survey of the 200 highest-paid CEOs of public companies found CEO compensation increased 14.1% from 2019 to 2020 compared to a 1.9% increase for workers. Elevated consumer prices have largely negated the benefits of accelerated worker wage growth in 2020.
Crucial Quote
In a virtual press conference, Fred Redmond, AFL-CIO’s secretary treasurer, characterized the theme of the new report as “greedflation,” a nod to growing executive pay as inflation hovers at its highest level since 1981.
Surprising Fact
A similar survey from the Institute for Policy Studies released last month found an even wider gap in compensation between CEOs and median workers, finding CEOs made 670 times more than their median workers in 2021, up from 2020’s 604-to-1 ratio. The study looked at 300 public companies that primarily employ low-wage workers.
Further Reading
CEO pay gains far outpace rising wages, says new union report (Reuters)
Gap Between CEO Pay And Worker Pay Continued To Widen During The Pandemic, New Survey Finds (Forbes)
Source: https://www.forbes.com/sites/dereksaul/2022/07/18/ceos-made-324-times-more-than-their-median-workers-in-2021-union-report-finds/