New data is out that is enough to make most of the American workforce enraged: CEO pay absolutely skyrocketed in 2023 (to a median of $16.3M) while lower-level workers remain desperate for pay increases to make ends meet as inflation on household goods wrecks budgets.ย ย
To say pay increases for S&P 500 CEOs are severely outpacing increases for employees is putting it mildly.ย
A study published by Equilar, in collaboration with The Associated Press, reveals the median total compensation for S&P 500 CEOs increased by 12.6% in 2023 to reach $16.3 million.ย
In comparison, the median income of the average S&P 500 employee rose by a modest 5.2% to $81,467 in 2023. As a result, the pay ratio between CEOs and their employees has expanded to 196:1 โ up from 185:1 in 2022. This growing disparity raises questions about the future of work, income inequality, and fair wage distribution.ย
Several factors are reported to contribute to the significant increase in CEO compensation, with stock awards cited as playing a pivotal role.ย ย
Equilarโs analysis shows in 2023, stock awards made up approximately 70% of the total compensation for CEOs, with their median value jumping by 10.7% to $9.4 million.ย ย
The top 10 highest-paid CEOs this year were:ย
- Broadcom Inc. – Hock E. Tan – $161,826,161ย
- Fair Isaac Corporation – William J. Lansing – $66,349,962ย
- Apple Inc. – Timothy D. Cook – $63,209,845ย
- Prologis, Inc. – Hamid R. Moghadam – $50,891,597ย
- Netflix, Inc. – Theodore A. Sarandos – $49,834,936ย
- Warner Bros. Discovery, Inc. – David M. Zaslav – $49,702,546ย
- Booking Holdings Inc. – Glenn D. Fogel – $46,720,734ย
- Adobe Inc. – Shantanu Narayen – $44,932,578ย
- Roper Technologies, Inc. – Laurence Neil Hunn – $41,295,585ย
- ServiceNow, Inc. – William R. McDermott – $37,606,244ย ย
Analysts at CNN Business suggest the disparity in pay has worsened at companies employing many hourly and part-time workers. For instance, Barbara Rentler, CEO of Ross Stores, reportedly earned $18.1 million in 2023. This is 2,100 times more than the median part-time hourly retail store associate, who took home just $8,618. Such cases illustrate the extreme disparities that can occur under current compensation frameworks.ย
On a state level, the report found that Virginia led the median CEO compensation figures with an average of $21.9 million, surpassing Indiana. Meanwhile, California boasts the highest number of S&P 500 CEOs in 2023, tallying 47. This is followed by New York with 33 and Texas with 28.ย
The trend of rising CEO pay amidst relatively stagnant employee wages is another. Addressing such disparities is essential not only for the well-being of workers but also for the overall health and sustainability of many organizations.ย
