Topline
Chief executives at S&P 500 companies will earn 324 times higher than the median workers at their companies in 2021 on average, according to an annual report from the largest U.S. labor union federation AFL-CIO released on Monday morning, as the gap between the compensation of top executives and workers continues to widen.
Apple CEO Tim Cook earned nearly $ 100 million in total compensation last year.
Basic Facts
The CEO-to-worker pay ratio is the largest since the AFL-CIO began tracking the metric in 2018 and increased from 299-to-1 in 2020.
The highest paid 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). million).
Jassy’s total compensation in 2021 is 6,474 times more than Amazon’s median worker, the highest ratio of any executive, according to the study.
An Amazon spokesperson explained to Reuters compensation that Jassy is the other top CEO’s competitor and her compensation package consists primarily of long-term restricted stock awards, reflecting other leaders on the AFL-CIO list, including Cook, who received $ 83 million worth of vested stock in his company last year.
Key Background
CEO wages have risen over the past decade: CEO compensation rose 1,322.2% from 1978 to 2020 adjusted for inflation, compared to an 18% increase in workers ’compensation, according to the Economic analysis Policy Institute released last year. The Covid-19 pandemic accelerated the compensation gap, a New York Times revealed a study conducted by Equilar in June. The Hours A survey of the 200 highest paid CEOs of public companies found that CEO compensation increased by 14.1% from 2019 to 2020 compared to a 1.9% increase for workers. High consumer prices have further undermined the benefits of accelerated labor wage growth in 2020.
Important Quotes
At a virtual press conference, Fred Redmond, the AFL-CIO’s secretary treasurer, referred to the theme of the new report as “greedflation,” a nod to executive pay increases as inflation rises to its highest level since 1981.
Surprising Fact
A similar survey from the Institute for Policy Studies released last month found a wider compensation gap between CEOs and median workers, finding CEOs earning 670 times higher than their median workers in 2021, from 2020’s 604-to-1 ratio. The study looks at 300 public companies that primarily employ low-wage workers.
Further Reading
CEO’s salary is more than wage increases, new union report says (Reuters)
Gap Between CEO Pay and Worker Pay Continues to Widening During Pandemic, New Survey Finds (Forbes)
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