The CEOs of S&P 500 firms earned a median of $18.3 million final yr — a rise of 18.2% and greater than double the U.S. inflation price, in response to a brand new report from the AFL-CIO labor union.
The union's annual report on government compensation, which has turn out to be a benchmark for rising inequality within the U.S., discovered that the ratio between CEO pay and employee earnings reached 324-to-1 final yr, up from 299-to-1 in 2020 and 264-to-1 in 2019.
The findings underscore the monetary stress that many employees at the moment are experiencing as a result of inflation, which is outpacing typical wage development. Though the pay of common employees rose 4.7% final yr, their actual earnings after inflation fell 2.4%. Against this, CEOs saved nicely forward of final yr's inflation price of seven.1%.
"It is one other model of 'extra for them and fewer for us'," mentioned AFL-CIO Secretary-Treasurer Fred Redmond in an announcement concerning the findings. "And it comes at a time when working folks's residing requirements have declined with each enhance within the value of meals, lease and fuel."
The report additionally pointed "greedflation" as a reason behind surging CEO pay. Some specialists blame company profit-taking, particularly as some firms enhance costs even greater than their underlying prices, as a driver of inflation.
"In the course of the pandemic, the ratio between CEO and employee pay jumped 23%," Redmond mentioned. "As a substitute of investing of their workforces by elevating wages and retaining the costs of their items and providers in test, their resolution is to reap document earnings from rising costs and trigger a recession that may put working folks out of our jobs."
$296 million paycheck
The everyday CEO is bolstering their pay with compensation by inventory choices, restricted inventory and non-equity incentives. As an example, the common CEO wage stood at about $1.2 million final yr, however the typical restricted inventory award amounted to virtually $10 million.
The highest-earning CEO final yr amongst S&P 500 companies was Expedia's Peter Kern, whose pay was greater than $296 million, in response to the AFL-CIO's calculations. Expedia famous that long-term fairness incentive awards account for 99% of Kern's 2021 compensation. The majority of these awards will vest in 2024, in response to the corporate's proxy.
In second place was Amazon CEO Andrew Jassy, with compensation of greater than $212 million.
Amazon mentioned Jassy's compensation features a inventory award that may vest over the next 10 years and that was tied to his transition final yr from the top of Amazon's AWS unit to the CEO of the corporate.
"As famous within the proxy, this award is meant to symbolize most of Andy's compensation for the approaching years," a spokesman mentioned.
The AFL-CIO singled out Amazon as having the very best hole between CEO-to-worker pay, at 6,474 to 1. Whereas Jassy's compensation stood at greater than $212 million final yr, the everyday Amazon employee earned lower than $33,000 yearly in 2021, the union mentioned.
Amazon's warehouses have been the middle of unionization efforts, with some successes and a few losses. The massive hole between a typical Amazon employee's pay and that of its CEO underscores why among the e-commerce big's employees are organizing union drives, the AFL-CIO mentioned.
"However working individuals are beginning to battle again in opposition to the economics of greedflation," Redmond mentioned. "From Bessemer, Alabama, to Staten Island, New York, Amazon employees are coming collectively to kind unions and negotiate for a good return on their work."
Amazon mentioned its jobs have a median beginning pay of $18, greater than twice the federal minimal wage, and that hourly pay could be as excessive as $28 an hour in some locations. "We're proud to supply compensation packages for our front-line staff that not solely embody nice pay, but in addition present complete advantages for full-time staff," the spokesman mentioned.