NEW YORK (AP) — The typical compensation for CEOs of S&P 500 companies keeps climber higher — and outpacing the wages of average workers today.
In its annual analysis of CEO pay for The Associated Press, executive data firm Equilar reviewed the salaries, bonuses, perks, stock awards and other pay components of 341 top executives. The survey found that median CEO pay jumped nearly 13% last year, more than three times the 4.1% that wages and benefits netted by private-sector workers rose through 2023.
The AP’s CEO compensation study included pay data for S&P 500 CEOs who have served at least two full consecutive fiscal years at their companies, which filed proxy statements between Jan. 1 and April 30. Beyond the widening gap in compensation between CEOs and their employees, the survey also spotlights persisting gender inequity — with women still making up a minuscule amount of those with chief executive titles compared to their male counterparts.
Here’s a breakdown of some of the biggest takeaways, by the numbers.
$16.3 million
That was the median pay package of CEOs last year, up 12.6% from 2022. The $16.3 million marks a midpoint, meaning half the CEOs made more and half made less.
200 YEARS
The gap between the person in the corner office and everyone else keeps getting wider. At half the companies in this year’s survey, it would take the worker at the middle of their employer’s pay scale almost 200 years to make what their CEO did — with those CEOs making at least 196 times what their median employee earned, up from 185 times last year.
The gap is particularly wide at companies where employees earn lower wages, such as retailers. At Ross Stores, for example, the company says its employee at the very middle of the pay scale was a part-time retail store associate who made $8,618. It would take 2,100 years earning that much to equal CEO Barbara Rentler’s compensation from 2023, valued at $18.1 million. A year earlier, it would have taken the median worker 1,137 years to match the CEO’s pay.
25 WOMEN
Of the 341 CEOs included in the AP’s annual compensation survey, just 25 are women. While that’s the most women making the list since the survey began in 2011, the numbers haven’t budged very much. The second highest tally was 21 women in 2017.
$17.6 million v. $16.3 million
The median pay package for female CEOs rose 21% to $17.6 million. That’s a bigger increase than what men saw: Their median pay package rose 12.2% to $16.3 million.
$162 million
Overall, Hock Tan, the CEO of Broadcom Inc., topped the AP survey with a pay package valued at about $162 million.
Broadcom granted Tan stock awards valued at $160.5 million on Oct. 31, 2022, for the company’s 2023 fiscal year. Tan was given the opportunity to earn up to 1 million shares starting in fiscal 2025, according to a securities filing, provided that Broadcom’s stock meets certain targets – and he remains CEO for five years.
$30.3 million
Lisa Su, CEO and chair of the board of chipmaker Advanced Micro Devices, was the highest paid female CEO in the AP survey for the fifth year in a row in fiscal 2023, bringing in total compensation worth $30.3 million — flat with her compensation package a year earlier. Her rank rose to 21 overall from 25.
Su received a base salary of $1.2 million and a performance bonus of more than $1.4 million. The bulk of her package was $21.8 million in stock awards.
11%
Many companies have heeded calls from shareholders to tie CEO compensation more closely to performance. As a result, a large proportion of pay packages consist of stock awards, which the CEO often can’t cash in for years, if at all — unless the company meets certain targets, typically a higher stock price or market value or improved operating profits.
The median stock award rose almost 11% last year, compared to a 2.7% increase in bonuses.
FAQs
The median pay package for female CEOs rose 21% to $17.6 million. That's a bigger increase than what men saw: Their median pay package rose 12.2% to $16.3 million. Overall, Hock Tan, the CEO of Broadcom Inc., topped the AP survey with a pay package valued at about $162 million.
How much has CEO pay increased compared to workers? ›
The CEO-to-worker pay gap grew in the last year as company boards scrambled to keep executives from quitting and businesses fared well in the stock market. In 2022, CEOs made roughly 185 times their typical worker; with the jump in 2023 numbers, CEOs now make roughly 196 times their employees.
What is the income gap between CEOs and workers? ›
In 2022, it was estimated that the CEO-to-worker compensation ratio was 344.3 in the United States. This indicates that, on average, CEOs received more than 344 times the annual average salary of production and nonsupervisory workers in the key industry of their firm.
What is a good CEO pay ratio? ›
Where the estimated pay ratio across all respondents was reported to be 10-to1, the same group of people reported an ideal pay ratio of 4.6-to-1. And there you have it. The ideal CEO-to-employee pay ratio is not even 5-to-1. That is nearly 50 times lower than the actual practiced pay ratio of 202-to-1.
Is it ethical for CEOs to be paid so much more than other employees? ›
There are serious problems with CEO compensation, but “excessive” pay is not the biggest issue. The relentless focus on how much CEOs are paid diverts public attention from the real problem—how CEOs are paid. In most publicly held companies, the compensation of top executives is virtually independent of performance.
How much does a CEO of a $50 million company make? ›
The median CEO total direct compensation across the entire survey population is $425,000. However, for companies with revenue under $50 million (Cousins Incorporated's size), the median total direct compensation is $280,000.
Which CEO pays all employees 70k? ›
Price gained recognition in 2015 after raising the minimum salary for Gravity Payments employees to $70,000 and lowering his own wage from $1.1 million to $70,000. He has been active on social media, especially Twitter, where his posts have been widely shared.
What is the average salary of a CEO of a Fortune 500 company? ›
CEO pay continues to outpace the pay of working people across the country. In the past 10 years, typical CEO pay at S&P 500 companies increased by more than $4 million, to an average of $17.7 million in 2023.
Are CEOs being overpaid? ›
Americans believe CEOs are overpaid relative to average workers. Only 16 percent believe CEOs are paid an appropriate amount relative to the average worker.
Why do CEOs take $1 salary? ›
Or, as put by The Hustle: “CEOs who take a $1 salary can afford to do so because they tend to be extraordinarily wealthy: 30% are on the Forbes 400 list of richest Americans, and the majority of them retain a much higher equity stake in their company than non-$1 salary CEOs.”
CEOs have dif- ferent talents and are matched to firms in a competitive assignment model. In market equilibrium, a CEO's pay depends on both the size of his firm and the aggregate firm size. The model determines the level of CEO pay across firms and over time, offering a benchmark for calibratable corporate finance.
When did CEO salaries skyrocket? ›
But executive compensation soared, especially in the 1980s and 1990s, when CEOs were lionized and a large chunk of their pay was linked to their company's stock performance. CEO pay skyrocketed along with the stock market, with the S&P 500 increasing by more than 1,000% since 1990.
Is executive compensation too high? ›
Executive pay at FTSE 100 companies is typically 100- to 150-times higher than the average full-time salary for employees at those companies. The disparity is even greater at companies in the S&P 500. To many, this simply feels excessive.
Who is the highest paid CEO in the world? ›
Top 10 highest paid CEOs
- Elon Musk, Tesla Inc.: Approx. ...
- Tim Cook, Apple Inc.: Approx. ...
- Sundar Pichai, Alphabet Inc.: Approx. ...
- Jensen Huang, NVIDIA: Approx. ...
- Reed Hastings, Netflix: Approx. ...
- Leonard Schleifer, Regeneron Pharmaceuticals: Approx. ...
- Marc Benioff, Salesforce: Approx. ...
- Satya Nadella, Microsoft: Approx.
The CEOs in this group averaged $16.7 million, while average worker pay stood at $61,900. Using a slightly different methodology and sample, the Economic Policy Institute found that CEOs were paid 344 times as much as a typical worker in 2022, up from an average pay ratio of just 21 to 1 in 1965.
How much has the CEO salary changed? ›
Realized compensation of the top CEOs shot up 1,085% from 1978 to 2023 (adjusting for inflation), compared with the slow 24% growth in a typical worker's annual compensation. CEO granted compensation rose 932% from 1978 to 2023.
What is the CEO to worker pay ratio companies? ›
Average CEO Pay Is Growing, Fueling Economic Inequality
The average CEO-to-worker pay ratio was 268-to-1 for S&P 500 Index companies in 2023. It would take more than five career lifetimes for workers to earn what CEOs receive in just one year.
How much does CEO pay compared to company size? ›
It turns out that we can estimate the CEO compensation elasticity with respect to firm revenue, and this number is around 0.3. That is, for a 1% increase in company size, CEO pay goes up by about one-third of 1%, or for a 10% increase in company size, CEO pay goes up by about 3%.
How much more money did a CEO make compared to one of their workers in 1992? ›
When compared to the pay of average workers, the increase is even more dramatic: In 1992, CEOs were paid 82 times the average of blue-collar workers; in 2004, they were paid more than 400 times those salaries. “Barry Bonds makes a lot of money because he's a great baseball player.
