Top S&P 500 CEOs' average percent raises more than double that of workers, study shows
Top executives at S&P 500 companies received a median pay increase last year that was more than double what typical employees got, data from a survey released Friday showed.
Information from the survey, which was examined by Equilar for The Associated Press, showed that wages for CEOs of these top businesses increased to a median of $12 million last year – which comes in at a 7 percent raise that equates to approximately $800,000.
That figure reportedly includes other types of payment, like stocks, on top of salary.
The eight-figure packages continue to rise as companies tie more of their CEOs’ pay to their stock prices, which are still near record levels, and as profits hit an all-time high last year due to lower tax bills and a still-growing economy, according to the outlet.
Comparatively, typical employees who work at these firms reportedly didn’t get as much of a boost in their salaries. The median increase for them was 3 percent last year, less than half the growth for CEOs, The Associated Press said.
One explanation for executives’ large wages is that board of directors – who establish how much CEOs make – often place a higher focus on what competitors could offer to steal them away than their wages in comparison to the rest of the workforce, the outlet noted.
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The Associated Press’ CEO compensation study included pay data for 340 executives at S&P 500 companies who have served at least two full consecutive fiscal years at their companies, which filed proxy statements between Jan. 1 and April 30. Some companies with highly paid CEOs did not fit these criteria and were excluded.
The Associated Press contributed to this report.