Economic Snapshot | Wages, Incomes, and Wealth

CEO compensation grew faster than the wages of the top 0.1 percent and the stock market

CEO compensation in the largest firms dipped temporarily in 2015 and remains 940.9 percent above its 1978 level. This growth in CEO compensation far exceeded the growth of the stock market, which grew forty-two percent less (up 542.9 percent). This shows that executives have done far better than the firms they have led and executive pay cannot be simply attributed to better firm performance. Neither can the spectacular rise in CEO compensation be attributed to the ‘market for talent’ providing more rewards for those at the top. The wages of the top 0.1 percent of wage earners (top one out of a thousand) is a decent proxy for the pay of the most financially successful and grew a remarkable 320.5 percent from 1978 to 2014 (the last year for which data are available).  Yet, CEO compensation grew roughly three times faster than the wages of the top 0.1 percent. The fact that CEO compensation grew so much faster than the pay of other very highly-paid earners, and far faster than stock prices, indicates that unique dynamics are at play and that corporate governance is not adequately restraining executive pay.

Economic Snapshot

CEO compensation has grown faster than the wages of the top 0.1 percent and the stock market: Cumulative percentage change in CEO compensation, wages of the top 0.1 percent, and the S&P 500, 1978–2015

Date CEO compensation Wages of the top 0.1 percent S&P 500
1978 0.00% 0.00% 0.00%
1979 5.81% -0.90% -2.16%
1980 11.97% 4.85% 1.45%
1981 18.48% 6.33% -0.06%
1982 25.37% 16.31% -11.89%
1983 32.66% 27.49% 13.29%
1984 40.37% 42.74% 8.78%
1985 48.53% 44.44% 22.45%
1986 57.17% 59.42% 52.23%
1987 66.31% 104.76% 78.75%
1988 75.98% 138.06% 59.75%
1989 86.21% 121.91% 86.05%
1990 125.32% 127.75% 83.61%
1991 172.66% 102.75% 99.23%
1992 229.93% 153.65% 114.75%
1993 269.92% 138.07% 127.61%
1994 192.91% 124.87% 127.30%
1995 294.33% 134.87% 161.13%
1996 401.44% 154.96% 214.76%
1997 663.00% 222.68% 301.35%
1998 1036.94% 251.67% 392.01%
1999 904.22% 296.89% 489.17%
2000 1270.10%  333.65% 512.70%
2001 668.15% 296.85% 398.65%
2002 578.74% 236.46%  308.51%
2003 767.72% 246.92% 287.92%
2004 853.69% 284.09% 342.50%
2005 1016.44% 303.29% 357.09%
2006 1143.90% 321.17% 380.58%
2007 1162.70% 358.30% 426.69% 
2008 791.96% 305.35% 318.93%
2009 610.64% 238.51% 226.69%
2010 751.05% 274.63% 286.50%
2011 764.82% 275.70% 316.64%
2012 908.08% 324.27% 344.15%
2013 955.95% 286.09% 421.65%
2014 1005.62% 320.54%  503.16%
2015 940.87% 542.86% 
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Notes: Wage data for the top 0.1 percent is not yet available for 2015.

Source: EPI analysis of Compustat Execucomp, Social Security Administration, and Federal Reserve Bank of St. Louis databases.

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