CEO pay averaged $16.7 million last year at S&P 500 companies, a decline
2023.08.03 15:38
© Reuters. A boardroom is seen at the legal offices of the law firm Polsinelli in New York City, New York, U.S., June 3, 2021. REUTERS/Andrew Kelly
By Ross Kerber
(Reuters) – chief executives made $16.7 million on average in 2022, 272 times the pay of their median workers, a new study showed on Thursday, a decline on both measures over the prior year as CEO compensation fell with poor stock returns.
The annual “Executive Paywatch” study released by the AFL-CIO, the top American labor union federation, has become a widely cited gauge of U.S. income inequality.
Average CEO pay fell from $18.3 million and 324 times median worker earnings in 2021 for companies in the same index. Poorer stock performance accounted for much of the decline in CEO pay in 2022 because their compensation is often tied partly to investor returns.
Meanwhile, real average hourly earnings for U.S. workers fell 1.6% for 2022, according to U.S. government figures.
“CEO pay fell more than worker pay but didn’t fall enough to make it fair or equal,” said study author Brandon Rees, the labor federation’s deputy director of corporations and capital markets. “This is an impossible level of compensation for an individual person to receive in just one year,” he said.
AFL-CIO officials also noted the CEOs’ average pay fell less than the 18% decline in the S&P 500’s total return last year. CEO pay information in the study was drawn from corporate disclosures.
The pay ratio in this year’s study was the lowest it has been since 2019 when it stood at 264. Driven by hefty stock awards, CEO compensation has trended upward. A decade ago, average S&P 500 CEO pay was $11.7 million, and companies were not required to report the ratio of CEO pay to that of their median worker.
The study also discussed the potential impact of artificial intelligence, which labor leaders worry will eliminate jobs.
