CEOs really made bank last year, unlike the people who work for them.

A recent study by the Economic Policy Institute found a continued rise in the pay gap between CEOs and their workers in 2017, with CEOs not just bringing home an average of 312 times more than their workers, but also got average pay increases of 17.5 percent—compared to employee wage increases that averaged a paltry 0.3 percent.

In addition, those CEOs are also leaving the 0.1 percent “in the dust,” according to the report, making 5.5 times as much as the average earner in the top 0.1 percent.

The study used two different measures to gauge CEO pay. One includes “stock options realized (in addition to salary, bonuses, restricted stock grants, and long-term incentive payouts,” and by that measure, the average CEO at the 350 largest companies in the U.S. brought home $18.9 million in compensation, a 17.6 percent increase over 2016.

Because of the fluctuation in people's tendencies to cash in stock options, dependent on market trends, the study also looked at CEO compensation through the lens of stock options, assigning them the value at the time they're granted. “By this measure,” the study says, “CEO compensation rose to $13.3 million in 2017, up from $13.0 million in 2016.”

In 1965, the study points out, the ratio of CEO-to-worker compensation was just 20:1, and in 1989 it was 58:1. The current 312:1 ratio doesn't hit the record, however, which was 344:1 in 2000, at its peak.

Says the study, “CEO compensation has grown far faster than stock prices or corporate profits. CEO compensation rose by 979 percent (based on stock options granted) or 1,070 percent (based on stock options realized) between 1978 and 2017. The corresponding 637 percent growth in the stock market (S & P Index) was far lower. Both measures of compensation are substantially greater than the painfully slow 11.2 percent growth in the typical worker's compensation over the same period and at least three times as fast as the 308 percent growth of wages for the very highest earners, those in the top 0.1 percent.”

Workers are all too aware of the disparity, which will continue in 2019; budget projections from Willis Towers Watson indicate that bosses plan only slightly larger pay increases for workers next year (although they will be willing to fork over bigger increases of 5.9 percent for discretionary bonuses to managers and nonexempt employees).

In addition, a report from the Federal Reserve Bank of San Francisco reports that in the wake of the financial crisis and Great Recession, the economy suffered a blow from which it has not yet, and is likely never to, recover from. The report says that the extent of the economic damage translates to a present-value lifetime income loss for Americans of $70,000 per person.

Still, there are outliers who skew the results, as the Guardian highlights: “McDonald's CEO Steve Easterbrook earned $21.7m while the McDonald's workers earned a median wage of just $7,017—a CEO-to-worker pay ratio of 3,101:1” and “[t]he average Walmart worker earned $19,177 in 2017 while CEO Doug McMillon took home $22.8m—a ratio of 1,188:1,” outliers in the tech industry actually drove down the multiplier thanks to the high worker salaries in that industry.

For instance, Jeff Bezos, Amazon CEO, made $1.7 million in 2017 while his workers earned an average of $28,446, a 59:1 ratio. And Mark Zuckerberg, cofounder of Facebook, got $8.8 million in 2017 while employees' pay averaged $240,430—a ratio of 37:1.

Instant Insights /

U.S. CEO-to-employee pay ratio hit 312:1 in 2017

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