By the numbers: CEOs make 312 times more than the average worker
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CEOs for the largest 350 companies in the United States earned an average of $18.9 million in 2017, according to a study from the Economic Policy Institute.
Why it matters: CEO pay in the United States has continued to grow the last few decades while worker wages have perpetually been frozen. The average wage for U.S. workers has only grown by .2% since last year and still trails behind inflation rates.
The big picture: The disparity for wages between U.S. CEOs and workers wasn't always this stark, Vox reports. The gap increased substantially once again this year and shows no sign of reversing.
How this happened: CEO compensation is largely dependent on the stock market. They're rewarded for stock awards and cashed in options rather than charges in salaries or cash bonuses, the report explains.
By the numbers: CEO compensation has grown 979% and 1,070% since 1978 depending on if compensation is measured by stock options granted or stock options realized.
- The average CEO made 312 times more than the average worker last year.
- That number increased from 2016, where the average CEO made 270 times more than the average worker — still disparate, but not as high.
- In 1965, CEOs made just 20 times more than the average worker.
- In large firms, CEOs average 5.5 times more pay than the top .1% of earning workers.
Be smart: These are only the numbers that have been reported so far. Corporate CEOs made way more than you think in 2017.
What's next: The report recommends setting higher marginal income tax rates for top earners in the country and setting a cap on compensation while taxing anything that exceeds it. Once this happens, the report says, incomes will balance out.
The bottom line: Income inequality likely won't be solved in the United States until the issue of CEO pay is solved.
