From 1978–2023, top CEO compensation shot up 1,085%, compared with a 24% increase in a typical worker’s compensation.
In 2023, CEOs were paid 290 times as much as a typical worker—in contrast to 1965, when they were paid 21 times as much as a typical worker.
That CEOs were paid nearly 10 times as much as the top 0.1% of U.S. wage earners in 2022 illustrates just how distorted CEO pay increases have become.
CEOs are getting paid more because of their leverage over corporate boards, not because of their skills or contributions they make to their firms. Exorbitant CEO pay has contributed to rising inequality in recent decades as it has likely pulled up the pay of other top earners—concentrating earnings at the top and leaving fewer gains for ordinary workers.
Policies that limit CEOs’ ability to collude with corporate boards to extract excessive compensation are needed to prevent the U.S. from becoming a winner-take-all society. These policies could include reinstating higher income tax rates at the very top, using tax policy to incentivize lower CEO pay, making shareholder votes on CEO compensation more binding, and using antitrust enforcement and regulation to rein in the market power of the largest firms.