This kind of pay disparity was not always a given. In 1965, CEOs typically earned 20 times the typical worker’s pay in their industries, according to a report from the left-leaning Economic Policy Institute (EPI).
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. In the same period, workers’ wages, adjusted for inflation, have barely budged.
In 2021, CEOs earned 399 times the typical worker, the EPI report found.
“Obviously, CEOs should be the highest-paid person in an enterprise,” said EPI Chief Economist Josh Bivens, who co-wrote the report. “But the question is, how much higher than everyone else?”