Employees at the middle of the pay scale of an S&P 500 company would have to work nearly 200 years to earn as much as their CEO did last year. A typical compensation package for CEOs at these companies increased by nearly 13% in 2023, an Associated Press analysis found. Meanwhile, wages and benefits for private-sector employee rose by 4.1%.
"In this post-pandemic market, the desire is for boards to reward and retain CEOs when they feel like they have a good leader in place," Kelly Malafis, founding partner of Compensation Advisory Partners in New York, told the AP. "That all combined kind of leads to increased compensation."
Sarah Anderson, director of the Global Economy Project at the progressive Institute for Policy Studies, believes the gap in earnings between top executives and workers plays into overall dissatisfaction about the economy. "Most of the focus here is on inflation, which people are really feeling, but they're feeling the pain of inflation more because they're not seeing their wages go up enough," she said.
Hock Tan, CEO of Broadcom Inc., topped the survey with a pay package valued at about $162 million. Other top-earning CEOs include William Lansing of Fair Isaac ($66.3 million); Tim Cook of Apple ($63.2 million); Hamid Moghadam of Prologis ($50.9 million); and Ted Sarandos, co-CEO of Netflix ($49.8 million).
Employees also are seeing wage gains, although at a much lower rate than those of CEOs. Workers across the country have been earning higher pay since the pandemic, with wages and benefits for private-sector employees rising 4.1% in 2023 after a 5.1% increase in 2022, according to the Labor Department. Even with these gains, however, the gap between the person in the corner office and everyone else keeps getting wider. Half of the CEOs in this year's pay survey made at least 196 times what their median employee earned, which is up from 185 times in the previous survey.
Although female CEOs are gaining ground, they still lag far behind their male counterparts. Twenty-five of the 341 CEOs surveyed were women, led by Lisa Su, CEO and board chair of chip maker Advanced Micro Devices. She was the highest paid female CEO for the fifth year, with a compensation package valued at $30.3 million. Other top-paid female CEOs include Mary Barra of General Motors ($27.8 million); Jane Fraser of Citigroup ($25.5 million); Kathy Warden of Northrop Grumman ($23.5 million); and Carol Tome of UPS ($23.4 million).
Many companies tie executive compensation to performance. A large portion of pay packages consist of stock awards, which the CEO often can't cash in for years, if at all, unless the company meets certain targets, typically a higher stock price or market value or improved operating profits. The median stock award rose almost 11% last year, compared to a 2.7% increase in bonuses.
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