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CEO Pay in 2012 Was Extraordinarily High Relative to Typical Workers and Other High Earners
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CEO Pay in 2012 Was Extraordinarily High Relative to Typical Workers and Other High Earners

Lawrence Mishel and Natalie Sabadish
EPI, 2013
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Editorial Rating

8

Qualities

  • Innovative

Recommendation

In the United States, the income gap between CEOs and all other workers, including the top 0.1% of workers, is vast and swelling. Economists Lawrence Mishel and Natalie Sabadish explore this yawning chasm, providing a fascinating analysis of historical trends. getAbstract recommends their distressing findings to corporate executives and human resources professionals, as well as to all employees who want to learn more about US income inequality.

Take-Aways

  • Between 1978 and 2012, the compensation packages of CEOs at the top 350 publicly traded US firms rose 875%, on average. During the same period, a typical US worker’s wage increased by a paltry 5.4%.
  • The gap between CEO compensation and what the average worker makes has widened substantially. In 1965, a top CEO earned just 20.1 times more than the average worker, compared to 272.9 times more in 2012.
  • Top wage earners also have lagged behind. “CEO pay relative to pay of top 0.1% wage earners grew…from 2.55 in 1989 to 4.70 in 2010, a rise (2.15) equal to the pay of more than two very high earners.”

About the Authors

Lawrence Mishel is president of the Economic Policy Institute, where Natalie Sabadish is a research assistant.

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