CEO pay goes up by 11% since 1978, highest multiple on record

It pays to be the top dog.

The pay for chief executive officers went up by just over 11% from 2020 to 2021, according to a report by the left-leaning Economic Policy Institute.

CEOs were paid 399 times as much in 2021 compared to the typical worker s pay, the highest multiple on record, according to EPI. In 1965, CEOs were paid 20 times more than the average worker made.

In 2021, CEOs were paid $27.8 million, the institute said.

Since 1978, CEO pay has gone up by 1,460%. CEO compensation rose by 36% faster than the stock market during this period, and far exceeded the slow 18.1% growth in the average worker's annual compensation over the span of 2021 dollars, according to the EPI.

Josh Bivens, director of research at EPI and one of the authors of the report said that Exorbitant CEO pay is a contributor to rising inequality that we could restrain without doing any damage to the wider economy.

He said that we need to enact policy solutions that would reduce incentives for CEOs to extract economic concessions and limit their ability to do so.

Dave Kamper, a senior state policy coordinator at EPI, wrote on Twitter that CEO pay has gone up 1,460% since 1978. In our last report before COVID started in 2019, it went up 940%. ONE THIRD of the TOTAL jump in CEO pay since 1978 has come in the past three years. The average CEO compensation of the 350 largest publicly owned U.S. companies was estimated by the EPI. It used data from the S&P Compustat ExecuComp database for the years 1992 to 2021, and survey data from the Wall Street Journal for selected years dating back to 1965.

The EPI noted a shift in how CEOs were paid: CEO compensation had been shifted from stock options to stock awards.

In 2021, the EPI flagged an extreme outlier who was excluded from the analysis because of how much their pay exceeded the typical CEO s: Elon Musk of Tesla Motors TSLA, The Tesla chief in 2021 exercised $23.5 billion in stock-option grants that would have expired in 2022, the EPI said. He made nearly 1,000 times the average pay for CEOs of large companies.

The think tank stated that including his pay would have resulted in an increase in CEO pay of more than 300%.