CEO pay takes a hit in 2023, but reaches 290 times average worker pay

According to a recent report, CEO pay declined significantly in 2023 despite a robust stock market. CEO pay was still surprisingly high, 290 times that of the average worker, despite this drop.

The Economic Policy Institute study revealed that by 2023 there was a nearly 20% decline in total compensation received by CEOs of publicly traded companies. Experts are puzzled by this surprising trend because executive pay tends to follow the performance of the stock market.

Main conclusions of the analysis of the Institute of Economic Policy

1. Between 1978 and 2023, top CEO compensation soared 1,085%, compared to a 24% increase in compensation for a typical worker.
2. In 2023, CEOs were paid 290 times more than a typical worker, up from 1965 when they were paid 21 times more than a typical worker.
3. That CEOs were paid almost 10 times more than the top 0.1% of US wage earners by 2022 illustrates how skewed CEO pay increases have become.
4. CEO pay is strongly correlated with the stock market, but in 2023, the stock market remained fairly stable, while there was an uncharacteristic drop in CEO pay.

In the past, CEO compensation packages have been strongly correlated with stock performance, with stock awards and options accounting for a sizable amount of their total earnings. However, despite strong economic conditions, new research indicates that this association broke down in 2023.

In a revealing finding, EPI’s analysis indicates that CEOs are paid more because of their influence on company boards, not because of the skills or contributions they make to their companies. The exorbitant pay of CEOs has contributed to rising inequality in recent decades, as it has likely driven up the pay of other higher earners, concentrating income at the top and leaving fewer gains for workers normal