17 August 2019   Leave a comment

The Economic Policy Institute has published its report on the compensation of Chief Executive Officers (CEOs) in the United States. The data confirm the trend toward economic inequality:

“Average pay of CEOs at the top 350 firms in 2018 was $17.2 million—or $14.0 million using a more conservative measure. (Stock options make up a big part of CEO pay packages, and the conservative measure values the options when granted, versus when cashed in, or “realized.”) CEO compensation is very high relative to typical worker compensation (by a ratio of 278-to-1 or 221-to-1). In contrast, the CEO-to-typical-worker compensation ratio (options realized) was 20-to-1 in 1965 and 58-to-1 in 1989. CEOs are even making a lot more—about five times as much—as other earners in the top 0.1%. From 1978 to 2018, CEO compensation grew by 1,007.5% (940.3% under the options-realized measure), far outstripping S&P stock market growth (706.7%) and the wage growth of very high earners (339.2%). In contrast, wages for the typical worker grew by just 11.9%.”

The report notes that the stock options often granted in compensation packages have increased dramatically in value as the stock market has gone up, often because of the buy-backs that were stimulated by the tax changes made by the US Congress in 2017.

Posted August 17, 2019 by vferraro1971 in World Politics

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