Workers in today's society would have needed to begin their careers prior to the Revolutionary War to rival the earnings of a typical CEO in 2024.
The AFL-CIO's latest Executive Paywatch report, released on Wednesday, sheds light on the growing income disparity between top executives and average workers in the United States. The report, titled "Executive Paywatch", reveals that S&P 500 CEOs earned an average total compensation of $18.9 million in 2024, marking a 7% increase from the previous year.
This staggering figure equates to 285 times more than the median worker’s pay of $66,000, up from a ratio of 268-to-1 in the prior year. Starbucks CEO Brian Niccol topped the list with a whopping $97.8 million in compensation, earning 6,666 times more than the company's median employee.
The report also found that non-equity incentive compensation, such as bonuses, accounted for about 17.6% of total CEO pay, averaging over $3.1 million. Salaries, on the other hand, are not the largest component of CEOs' compensation; nearly half of their total pay comes from restricted stock awards.
The AFL-CIO's findings underscore the widening income gap between CEOs and workers, with CEO pay increasing by 7% in 2024 from the prior year, while the typical private sector worker's raise last year was only 3%. The report also highlights extreme disparities in CEO compensation within major corporations.
The AFL-CIO, a powerful federation of labor unions representing 15 million workers, also points out that the tax and spending cuts package signed by President Donald Trump in July 2024 will provide CEOs with far bigger tax breaks than workers. The average CEO will receive a tax cut of nearly $490,000 from the permanent extension of the lower individual income tax rates, while the typical US worker receives a tax break of $765.
The report also mentions significant political donations from wealthy CEOs to Donald Trump’s campaigns and inauguration, suggesting these contributions were followed by regulatory changes favouring these executives' companies. However, it is not specified if the tax breaks and CEO pay figures are adjusted for inflation.
In conclusion, the AFL-CIO's 2024 Executive Paywatch report serves as a stark reminder of the growing income inequality in the US, highlighting the extreme disparities in CEO compensation within major corporations. The report calls for a more balanced approach to executive pay and taxation to bridge the gap between the rich and the working class.
[1] AFL-CIO Executive Paywatch Report 2024 [2] Forbes [3] The Guardian [4] CNBC [5] Bloomberg [6] Wall Street Journal
- The discrepancy between CEO and average worker earnings, as outlined in the AFL-CIO's 2024 Executive Paywatch report, is heavily influenced by factors such as business, finance, and politics, as some CEOs receive large tax breaks and make substantial political donations.
- The AFL-CIO's report, in addition to detailing the growing income gap between CEOs and workers, also reveals the impact of general-news events like tax reforms and political donations on the income disparity in the United States.
