Home > upward income redistribution > CEO-to-worker compensation ratio, USA 1965 – 2013

CEO-to-worker compensation ratio, USA 1965 – 2013

from David Ruccio

CEO-worker

In charting the amount of the surplus that ends up in the hands (or, if you prefer, pockets or bank accounts) of CEOs, the Economic Policy Institute finds that: 

  • Average CEO compensation was $15.2 million in 2013, using a comprehensive measure of CEO pay that covers CEOs of the top 350 U.S. firms and includes the value of stock options exercised in a given year, up 2.8 percent since 2012 and 21.7 percent since 2010.
  • From 1978 to 2013, CEO compensation, inflation-adjusted, increased 937 percent, a rise more than double stock market growth and substantially greater than the painfully slow 10.2 percent growth in a typical worker’s compensation over the same period.
  • The CEO-to-worker compensation ratio was 20-to-1 in 1965 and 29.9-to-1 in 1978, grew to 122.6-to-1 in 1995, peaked at 383.4-to-1 in 2000, and was 295.9-to-1 in 2013, far higher than it was in the 1960s, 1970s, 1980s, or 1990s.
  • If Facebook, which they exclude from their data due to its outlier high compensation numbers, were included in the sample, average CEO pay was $24.8 million in 2013, and the CEO-to-worker compensation ratio was 510.7-to-1.

 

  1. June 25, 2014 at 8:58 am

    Reblogged this on ..::popular spanish practices::.. and commented:
    There’s an amazing increasing difference between both, obviously. And the tendency is also clear, so the question in this case is: what can average people do to reverse this unfair situation?

  2. Herb Wiseman
    June 25, 2014 at 12:39 pm

    When capitalism works as it is designed to work, this is the natural consequence and it is just like cigarettes. When cigarettes works as they are designed, they kill many people — most – but a few survive. When a union goes on strike, whether it is my colleagues at the Region of Durham or in the private sector, it is a push-back against the BUILT-IN INEQUITIES AND UNFAIRNESS designed as part of the capitalist system just as the anti-smoking campaigns were push-backs against the power of the cigarette companies. Managers in these governments and corporations know that their job is to oppose the push-back from the workers because they are the hand maidens of the elite — often unwittingly. The success of the PR industry has been that they have successfully trained up these leaders, the losers in this struggle as well as some of the leaders of some of the unions in the capitalist ideology, which has become a faith for many.

  3. William Neil
    June 25, 2014 at 2:02 pm

    Thanks very much for this posting. It occurs, right in the flow, of the Clinton comments about their wealth; I want to say they were claiming that they were just still middle class, but that would be an exaggeration on my part. And to be scrupulously fair to them, they are not CEO’s, although shrewd former political CEO’s, that would be the POTUS’s, seem able, if so inclined, to later really rake it in. The more direct linkage to the Clintons is however, that the dramatic “takeoff” in CEO compensation occurred during his (their?) first two terms.

    This is important for policy people and thinkers on the left, including economists. I think readers of this blog, knowing the struggles that they have had with the economic establishment, and Krugman’s very public ones (even as he is more mainstream than he likes to think), know that the Democratic Party views the 1990’s and the Clinton “formula” as the template for future economic policy.

    From where I sit, not far outside the Beltway around DC, the frantic ambitions and accompanying pace of life mean the scramblers for standing in the Democratic Party, in most cases, have very little time, and perhaps inclination, to reexamine the premises of our economic system. A chart like this might just catch their attention though, and set them to wondering how it happened under one of their own, with a successor waiting in the wings.

    I have a little different view of things, and hope that “inevitability” will not crush hope in the coming years. Perhaps that comes from reading Ira Katznelson’s “Fear Itself: The New Deal and the Origins of Our Time” side by side with Thomas Piketty’s “Capital in the 21st Century.” In his powerful Epilogue, Katznelson says the procedural state that the New Deal left us after its crusading days (1932-1936) were over, (blocked and stalemated by the prototype of Southern Democrat-Republican alliance) has evolved into a “a state without substance” and a “politics without public purpose or norms.” The chart shows who stepped into this vacuum in the succeeding decades, although we shouldn’t “personalize” it to just these CEO’s; they operate at the top of economic institutions, the chief shapers of the “managed democracy” Sheldon S. Wolin has scoped out for us in “Democracy Inc.” His book blends so smoothly into where Katznelson closed his 706 page book that it is impossible not to see the continuity of the two.

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