The average S&P 500 company CEO made 299 times the average worker’s salary last year as the difference between CEO and median employee pay grew in 2020 despite the Covid pandemic and ongoing relief efforts.
Executives received $15.5 million in total compensation on average, marking an increase of more than $260,000 per year over the past decade. At the same time, the average production and nonsupervisory worker in 2020 earned $43,512, up just $957 a year over the past decade.
Both average compensation and pay ratios grew in 2020 during the pandemic. Executives’ average total compensation increased more than $700,000 last year while CEO-to-worker pay ratios increased from 264:1 in 2019.
The highest-compensated CEO in 2020 was Chad Richison of Paycom, who received more than $200 million in salary and stock awards. Other companies with executives topping the list of highest-paid CEOs include General Electric, Regeneron Pharmaceuticals, Hilton, T-Mobile, Nike, Microsoft, and Netflix. The most skewed pay scale belonged to Aptiv, which had a 5,294:1 CEO-to-worker pay ratio last year. While the company’s CEO, Kevin Clark, was compensated with more than $31 million in 2020, its median employee pay was $5,906.
Other companies topping that list include The Gap, Paycom, Chipotle, Hilton, Nike, and Coca-Cola.
Companies in the consumer discretionary industry, including retailers like Amazon, had the highest disparity with an average 741:1 CEO-to-worker ratio.
The difference between executives’ pay compared to other workers at big corporations has been of growing interest since the 2008 recession when federal officials mandated that companies publicly disclose that data.
At the start of the coronavirus pandemic last year, many CEOs and top executives announced they would be taking a pay cut or forgoing their salaries altogether. At big corporations, the move to give up some pay wasn’t enough to engender drastic improvements for lower-paid employees or make up for pandemic losses, but it was symbolic and necessary to show workers that executives were impacted by the crisis, too.
Despite a slight decrease in CEO base pay, CEOs enjoyed increases in their equity compensation, especially in stock-based pay, which increased over $1 million last year.
For example, while the average CEO salary at S&P 500 companies was a little more than $1 million, performance-based compensation accounted for an additional $14 million, bringing the average total compensation to more than $15 million last year.
On average, CEOs of S&P 500 companies saw their total compensation grow 5% in 2020 while the disclosed median employee pay grew only 1% at those same companies. The growing difference between CEO and worker pay comes after a year of economic turmoil and in the midst of a recovering economy.
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