US CEOs earn 300 times as average workers: Report
Amid growing concern over income inequality, the most senior corporate officers in the United States made over 300 times as much as the average worker last year, according to a new report released Monday.
US chief executive officers (CEO) earned 303 times more than a "typical" worker in 2014, according to the Economic Policy Institute, a left-leaning think tank based in Washington, DC.
The report found that average CEO compensation for the largest firms was $16.3 million in 2014, an increase of 3.9 percent from last year and 54.3 percent since the end of the Great Recession in 2009.
This compared to the average industrial worker that is still experiencing stagnant wages and a labor market that has seen wages drop by an average of 1.7 per cent since 2009.
CEO compensation in 2013 was also nearly six times higher than others in the top 0.1 percent of earners, according to the study.
The report said CEO compensation growth did not reflect greater productivity for executives or a higher skill set, but "the power of CEOs to extract concessions."
There is a false notion that the extraordinarily high compensation of executives is proportional to the skill required to run a large company, says Lawrence Mishel, president of the Economic Policy Institute and co-author of the report.
"The evidence says that the extraordinary growth in pay does not correspond to increased productivity. The pie hasn't grown, in other words, but CEOs are cutting themselves a bigger slice," Mishel said.
"This data would suggest that executives are not only 300 times more talented than the average worker, but also six times more talented and valuable than other people in the top one-thousandth of earners," he noted.
CEO compensation often increases when the stock market rises and firms' stock prices increase with it, the report said. "It seems evident that individual CEOs are not responsible for this broad improvement in profits in the past few years, but they clearly are benefiting from it.”
The report comes at a time when income inequality is of increasing concern in the United States.
In 2013, the median wealth of the nation's upper-income families was almost seven times higher than the median wealth of middle-income families, the widest gap on record, according to data from the Pew Research Center.
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