SUBSCRIBE: Newsletter

Human Resources



WATCH how CEO pay continues to rise

HR Masterclass Series: We're going virtual! New courses, new formats!
Review the 2020 masterclasses here »

The average compensation for the American CEO has gone up by 21.7% since 2010, and up 2.8% since last year.

A survey by the Economic Policy Institute of the top 350 firms in the US found the average CEO received $15.2 million in 2013. The worker-to-CEO compensation ratio was 295.9 to one – meaning the annual wage of one average CEO is that same as the combined average wage of around 296 workers.

If Facebook – which was excluded from this survey – was included, that ratio would jump to 510.7 to one, and the average CEO pay would have been $24.8 million in 2013.

These figures also show between 1978 and 2013, CEO compensation has increased by 937% – more than double the stock market growth in the same period.

CEO compensation has also been the fastest growing among workers, and in 2012 was 4.75 times greater than that of the top 0.1% of US wage earners.

“That CEO pay grew far faster than pay of the top 0.1% of wage earners indicates that CEO compensation growth does not simply reflect the increased market value of highly paid professionals in a competitive market for skills (the “market for talent”) but reflects the presence of substantial rents embedded in executive pay (meaning CEO pay does not reflect greater productivity of executives),” the report said.

[ALSO READ: Annual compensation for CEOs revealed]

The report also highlights there are policies which can be implemented to “curtail escalating executive pay and broaden wage growth for the majority of workers”, such as implementing higher marginal income tax rates.

“Other policies that can potentially limit executive pay growth are changes in corporate governance, such as greater use of ‘say on pay’, which allows a firm’s shareholders to vote on top executives’ compensation,” the report added.

Image: Shutterstock

Human Resources magazine and the HR Bulletin daily email newsletter:
Asia's only regional HR print and digital media brand.
Register for your FREE subscription now »

Read More News

in All markets by

Suite Talk: James Lim, BD

James Lim, president for Greater Asia at BD, on where leaders can be successful (and where they can't - no matter how hard they tr..


Leave a Reply

You must be logged in to post a comment.