SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
Corporate CEO Pay Was 276 Times the Average Worker's Income Last Year
Chief executives at the most powerful corporations in America earned an average of $15.5 million in 2015
Jul 12, 2016
As global inequality skyrockets, CEOs at the 350 largest corporations in America took in about 276 times the pay of the average worker in 2015, according to the latest numbers from the Economic Policy Institute (EPI).
"CEOs are getting more because of their power, not because they are more productive, or have special talent, or more education."
--Economic Policy InstituteCEO pay is up 46.5 percent since a relative low point in 2009, following the 2008 market crash. "Amid a healthy recovery on Wall Street following the Great Recession, CEOs have enjoyed outsized income gains even relative to other very-high-wage earners," EPI observes.
Yet, most of the rest of the country never saw a recovery from the global recession: Middle class jobs have disappeared, the working class has continued to struggle, and child poverty has risen nationwide.
"From 1978 to 2015, inflation-adjusted compensation of the top CEOs increased 940.9 percent," EPI writes, "a rise 73 percent greater than stock market growth and substantially greater than the painfully slow 10.3 percent growth in a typical worker's annual compensation over the same period."
And while the average CEO pay technically declined slightly from 2014 to 2015, it was a result of a dip in the stock market and not because of any widespread changes in how executive pay is determined. For that reason, "CEO pay can be expected to resume its sharp upward trajectory when the stock market resumes rising," EPI notes.
EPI reports that "CEO pay is growing a lot faster than profits, the pay of the top 0.1 percent of wage earners, and the wages of college graduates. This means that CEOs are getting more because of their power, not because they are more productive, or have special talent, or more education. If CEOs earned less or were taxed more, there would be no adverse impact on output or employment."
The problem highlighted by EPI is indeed a grave one, observes Alan Pyke in ThinkProgress. "The figures on CEO pay and on Wall Street's share of the national take-home are not sustainable for a democracy," Pyke writes.
"As working people get locked out of economic mobility, they become less enthusiastic about democracy and more susceptible to authoritarianism. Their political institutions become more and more responsive to the interests of the wealthiest, fraying the fabric of open society even more quickly," Pyke adds.
EPI proposes the following policy changes to remedy the problem of ballooning executive salaries:
- Reinstate higher marginal income tax rates at the very top
- Remove the tax break for executive performance pay
- Set corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation
- Allow greater use of "say on pay," which allows a firm's shareholders to vote on top executives' compensation
Such policy changes are within reach, Pyke argues, but it's not clear given today's political climate whether they will ever be come to pass, since the people "politicians have to rub elbows with at fundraisers are busy denying there's a problem at all."
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
As global inequality skyrockets, CEOs at the 350 largest corporations in America took in about 276 times the pay of the average worker in 2015, according to the latest numbers from the Economic Policy Institute (EPI).
"CEOs are getting more because of their power, not because they are more productive, or have special talent, or more education."
--Economic Policy InstituteCEO pay is up 46.5 percent since a relative low point in 2009, following the 2008 market crash. "Amid a healthy recovery on Wall Street following the Great Recession, CEOs have enjoyed outsized income gains even relative to other very-high-wage earners," EPI observes.
Yet, most of the rest of the country never saw a recovery from the global recession: Middle class jobs have disappeared, the working class has continued to struggle, and child poverty has risen nationwide.
"From 1978 to 2015, inflation-adjusted compensation of the top CEOs increased 940.9 percent," EPI writes, "a rise 73 percent greater than stock market growth and substantially greater than the painfully slow 10.3 percent growth in a typical worker's annual compensation over the same period."
And while the average CEO pay technically declined slightly from 2014 to 2015, it was a result of a dip in the stock market and not because of any widespread changes in how executive pay is determined. For that reason, "CEO pay can be expected to resume its sharp upward trajectory when the stock market resumes rising," EPI notes.
EPI reports that "CEO pay is growing a lot faster than profits, the pay of the top 0.1 percent of wage earners, and the wages of college graduates. This means that CEOs are getting more because of their power, not because they are more productive, or have special talent, or more education. If CEOs earned less or were taxed more, there would be no adverse impact on output or employment."
The problem highlighted by EPI is indeed a grave one, observes Alan Pyke in ThinkProgress. "The figures on CEO pay and on Wall Street's share of the national take-home are not sustainable for a democracy," Pyke writes.
"As working people get locked out of economic mobility, they become less enthusiastic about democracy and more susceptible to authoritarianism. Their political institutions become more and more responsive to the interests of the wealthiest, fraying the fabric of open society even more quickly," Pyke adds.
EPI proposes the following policy changes to remedy the problem of ballooning executive salaries:
- Reinstate higher marginal income tax rates at the very top
- Remove the tax break for executive performance pay
- Set corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation
- Allow greater use of "say on pay," which allows a firm's shareholders to vote on top executives' compensation
Such policy changes are within reach, Pyke argues, but it's not clear given today's political climate whether they will ever be come to pass, since the people "politicians have to rub elbows with at fundraisers are busy denying there's a problem at all."
As global inequality skyrockets, CEOs at the 350 largest corporations in America took in about 276 times the pay of the average worker in 2015, according to the latest numbers from the Economic Policy Institute (EPI).
"CEOs are getting more because of their power, not because they are more productive, or have special talent, or more education."
--Economic Policy InstituteCEO pay is up 46.5 percent since a relative low point in 2009, following the 2008 market crash. "Amid a healthy recovery on Wall Street following the Great Recession, CEOs have enjoyed outsized income gains even relative to other very-high-wage earners," EPI observes.
Yet, most of the rest of the country never saw a recovery from the global recession: Middle class jobs have disappeared, the working class has continued to struggle, and child poverty has risen nationwide.
"From 1978 to 2015, inflation-adjusted compensation of the top CEOs increased 940.9 percent," EPI writes, "a rise 73 percent greater than stock market growth and substantially greater than the painfully slow 10.3 percent growth in a typical worker's annual compensation over the same period."
And while the average CEO pay technically declined slightly from 2014 to 2015, it was a result of a dip in the stock market and not because of any widespread changes in how executive pay is determined. For that reason, "CEO pay can be expected to resume its sharp upward trajectory when the stock market resumes rising," EPI notes.
EPI reports that "CEO pay is growing a lot faster than profits, the pay of the top 0.1 percent of wage earners, and the wages of college graduates. This means that CEOs are getting more because of their power, not because they are more productive, or have special talent, or more education. If CEOs earned less or were taxed more, there would be no adverse impact on output or employment."
The problem highlighted by EPI is indeed a grave one, observes Alan Pyke in ThinkProgress. "The figures on CEO pay and on Wall Street's share of the national take-home are not sustainable for a democracy," Pyke writes.
"As working people get locked out of economic mobility, they become less enthusiastic about democracy and more susceptible to authoritarianism. Their political institutions become more and more responsive to the interests of the wealthiest, fraying the fabric of open society even more quickly," Pyke adds.
EPI proposes the following policy changes to remedy the problem of ballooning executive salaries:
- Reinstate higher marginal income tax rates at the very top
- Remove the tax break for executive performance pay
- Set corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation
- Allow greater use of "say on pay," which allows a firm's shareholders to vote on top executives' compensation
Such policy changes are within reach, Pyke argues, but it's not clear given today's political climate whether they will ever be come to pass, since the people "politicians have to rub elbows with at fundraisers are busy denying there's a problem at all."
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.