CEO pay gains far outpace rising wages, says US union report

S&P 500 chief executives made US$18.3 million on average in 2021, 324 times the pay of their median workers and higher than the ratio in 2020, the top American labour union federation reported on Monday (Jul 18).

Corporate leaders' raises far outpaced wage gains that failed to keep up with inflation, said the AFL-CIO, in an annual report that has become widely cited as a measure of US inequality trends.

"It's another version of more for them and less for us," said AFL-CIO secretary-treasurer Fred Redmond on a conference call to introduce the report.

The 2021 CEO-to-worker ratio in the S&P 500 was the widest since 2018, when the federation was first able to track the figure based on new disclosures. The ratio was 299-to-1 in 2020.

Amazon.com CEO Andy Jassy's total compensation of US$212.7 million last year was 6,474 times that of its median worker. That was the highest ratio out of all S&P 500 companies based on their latest proxy statements, the AFL-CIO said.

A spokesperson for Amazon said that Jassy's compensation was "competitive with that of CEOs at other large companies" as it vests over 10 years.

The highest paid CEO in the S&P 500 was Peter Kern of online travel company Expedia Group, whose compensation totalled US$296.2 million, according to the study.

An Expedia spokesperson noted details in the company's proxy statement about Kern's compensation, including that equity awards make up the bulk of the pay package and will not fully vest until at least 2026.

Top CEOs benefited from big stock awards and cash bonuses last year. The federation found S&P 500 CEOs' average pay rose 18 per cent in 2021, while US consumer prices rose 7 per cent.

Other federal figures cited by the AFL-CIO show nominal worker wages rose 4.7 per cent last year, but fell 2.4 per cent adjusted for inflation. REUTERS

KEYWORDS IN THIS ARTICLE

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes