CEO compensation, CEO-to-worker compensation ratio, and stock prices (2017 dollars), 1965–2017
| CEO annual compensation (in thousands)* | Private-sector production/nonsupervisory workers annual compensation (in thousands) | Stock market (indexed to $2017) | CEO-to-worker compensation ratio*** | |||||
|---|---|---|---|---|---|---|---|---|
| Based on options realized | Based on options granted | All private-sector workers | Firms’ industry** | S&P 500 | Dow Jones | Based on options realized | Based on options granted | |
| 1965 | 902 | 688 | 40.9 | n/a | 588 | 6,078 | 20.0 | 14.5 |
| 1973 | 1,177 | 898 | 48.0 | n/a | 520 | 4,473 | 22.2 | 16.1 |
| 1978 | 1,612 | 1,230 | 49.1 | n/a | 325 | 2,780 | 29.7 | 21.6 |
| 1989 | 3,004 | 2,291 | 46.7 | n/a | 605 | 4,704 | 58.2 | 42.3 |
| 1995 | 5,830 | 6,468 | 46.8 | 56.3 | 850 | 7,058 | 112.3 | 123.2 |
| 2000 | 21,048 | 21,136 | 49.4 | 58.9 | 1,994 | 14,985 | 343.5 | 360.5 |
| 2007 | 19,503 | 13,583 | 51.4 | 61.2 | 1,714 | 15,290 | 327.4 | 226.9 |
| 2009 | 10,983 | 10,550 | 53.4 | 62.5 | 1,063 | 9,963 | 187.8 | 175.7 |
| 2013 | 15,903 | 12,193 | 52.9 | 62.2 | 1,696 | 15,487 | 278.6 | 204.7 |
| 2014 | 16,843 | 12,688 | 53.1 | 62.9 | 1,960 | 17,023 | 284.0 | 213.4 |
| 2015 | 16,564 | 12,716 | 53.9 | 64.2 | 2,088 | 17,814 | 271.6 | 208.5 |
| 2016 | 16,030 | 13,039 | 54.5 | 62.2 | 2,095 | 17,927 | 270.1 | 219.9 |
| Projected 2017 | 18,855 | 13,264 | 54.6 | 62.4 | 2,398 | 21,292 | 311.7 | 220.7 |
| 2016 FH | 15,200 | 12,768 | 54.5 | 62.2 | 2,095 | 17,927 | 257.3 | 215.7 |
| 2017 FH | 17,880 | 12,988 | 54.6 | 62.4 | 2,398 | 21,292 | 298.9 | 216.5 |
| Percent change | Change in ratio | |||||||
| 1965–1978 | 78.7% | 78.7% | 19.9% | n/a | -44.7% | -54.3% | 9.8 | 7.1 |
| 1978–2000 | 1,205.5% | 1,618.8% | 0.7% | n/a | 513.0% | 439.1% | 313.8 | 338.8 |
| 2000–2017 | -10.4% | -37.2% | 10.5% | 6.0% | 20.2% | 42.1% | -31.8 | -139.7 |
| 2009-2017 | 71.7% | 25.7% | 2.1% | -0.1% | 125.6% | 113.7% | 123.9 | 45.0 |
| 1978–2017 | 1,069.5% | 978.6% | 11.2% | n/a | 636.9% | 666.0% | 282.0 | 199.1 |
| 2016–2017 | 17.6% | 1.7% | 0.2% | 0.3% | 14.5% | 18.8% | 41.6 | 0.9 |
*CEO annual compensation is computed using the “options realized” and “options granted” compensation series for CEOs at the top 350 U.S. firms ranked by sales. The “options realized” series includes salary, bonus, restricted stock grants, options realized, and long-term incentive payouts for CEOs at the top 350 U.S. firms ranked by sales. The “options granted” series includes salary, bonus, restricted stock grants, value of options granted, and long-term incentive payouts.
**Annual compensation of the workers in the key industry of the firms in the sample.
***Based on averaging specific firm ratios and not the ratio of averages of CEO and worker compensation.
Notes: Projected value for 2017 is based on the change in CEO pay as measured from June 2016 to June 2017 applied to the full-year 2016 value. Projections for compensation based on options granted and options realized are calculated separately. “FH” denotes preliminary values from the “first half” of the year.
Source: Authors’ analysis of data from Compustat’s ExecuComp database, the Federal Reserve Economic Data (FRED) database from the Federal Reserve Bank of St. Louis, the Bureau of Labor Statistics’ Current Employment Statistics data series, and the Bureau of Economic Analysis NIPA tables