The salary of Chief Executive Officers significantly declined in 2023 despite a robust stock market, according to a recent report. CEO pay was still astoundingly high-290 times higher than the ordinary worker-despite this drop.
The Economic Policy Institute's study revealed that in 2023, there was an almost 20% decline in the total compensation received by chief executives of publicly traded corporations. Experts are puzzled by this surprising trend because executive salary usually follows the performance of the stock market.
Key Findings from the Economic Policy Institute Analysis
- From 1978-2023, top CEO compensation shot up 1,085%, compared with a 24% increase in a typical worker's compensation.
- In 2023, CEOs were paid 290 times as much as a typical worker-in contrast to 1965, when they were paid 21 times as much as a typical worker.
- That CEOs were paid nearly 10 times as much as the top 0.1% of U.S. wage earners in 2022 illustrates just how distorted CEO pay increases have become.
- CEO pay is linked strongly to the stock market-but in 2023, the stock market held fairly steady, while there was an uncharacteristic dip in CEO pay.
In the past, CEO compensation packages have been strongly correlated with stock performance, with stock awards and options accounting for a sizable amount of their total income. Nevertheless, despite the robust economic conditions, the new research indicates that this association was broken in 2023.
In an eye-opening conclusion, the EPI analysis indicates that CEOs are getting paid more because of their leverage over corporate boards, not because of the skills or contributions they make to their firms. Exorbitant CEO pay has contributed to rising inequality in recent decades as it has likely pulled up the pay of other top earners-concentrating earnings at the top and leaving fewer gains for ordinary workers.
