We’ve all heard it before: “The rich get richer, while the poor get poorer” — or some variation of that saying. Sometimes it seems like the system was built to work against the average worker, and if you feel that way or live paycheck to paycheck, you’re not alone.
According to a recent study on corporate greed, “Wall Street and corporate CEOs have created an economy that is dangerously out of balance.” The Executive Paywatch Report, compiled annually by the AFL-CIO, the largest U.S. labor union, sheds new light on the widening gap between top executives and their employees.
Here’s a look at some of the July 18 report’s key findings:
- As U.S. inflation rose by 7.1% in 2021, CEOs of S&P 500 companies received a salary bump of 18.2%, for an average of $18.3 million added to their total compensation last year.
- By comparison, their workers’ wages fell well behind inflation levels, with the average salary rising by only 4.7%. On average, the CEO-to-worker pay ratio was 324-to-1. (That same ratio was 299-to-1 in 2020 and 264-to-1 in 2019.)
- The disproportionate figures brought economists and researchers to coin the term greedflation, which is used to describe how large corporations increase their prices to “boost corporate profits and create windfall payouts for corporate CEOs.”
- Topping the list for highest paid executive was Expedia CEO Peter Kern, earning a total of $296.2 million, followed by new Amazon CEO Andy Jassy (pictured) with $212.7 million. Jassy took over the reins from founder Jeff Bezos last year and received stock options and bonuses along with his salary.
- Other executives near the top of AFL-CIO’s list were also similarly compensated with long-term restricted stock awards — including Apple CEO Tim Cook, who ranked fifth, with $98.7 million in total compensation, $83 million of which came from vested stock.
According to a study by the Economic Policy Institute last year, CEO pay has skyrocketed in the last several decades.
CEO compensation rose by a staggering 1,322.2% from 1978 to 2020 (after adjusting for inflation), compared with an 18% increase in average worker compensation.
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