April 20, 2012
Here’s why CEO pay matters
The average CEO pay of companies in the S&P 500 Index rose to $12.94 million in 2011. Overall, the average level of CEO pay in the S&P 500 Index increased 13.9 percent in 2011, following a 22.8 percent increase in CEO pay in 2010. Click here to read more about it.
For perspective, the Big Chiefs at companies in the S&P 500 pulled down pay equal to 380 times the average workers’ pay. Thirty years ago, that number was just 42 times.
The average pay for a CEO in North Carolina is $4.2 million – over 100 times the average annual income for North Carolina workers! Click here to see CEO pay by state.
AFL-CIO has put together an info-graphic that is sure to take your breath away (if you’re still breathing after reading that last statistic!):
CEOs supposedly deserve all this money for increasing shareholder value. However, while the average CEO pay increased 13.9 percent at S&P 500 Index companies in 2011, the S&P 500 Index ended the year at the same level as it started.
This double-digit increase in average CEO pay for the second consecutive year shows just how disconnected the top 1 percent is from the 99 percent. In 2011, average wages increased just 2.8 percent and average worker pay totaled $34,053.
Both workers and shareholders have suffered over the previous decade. On Dec. 31, 2010, the S&P 500 Index closed 19 percent below its high on March 24, 2000. U.S. median household income fell $3,719 between 2000 and 2010.
Runaway CEO pay is one reason why income inequality is growing in the United States. A Congressional Budget Office report found that inequality has risen dramatically, with the top 1 percent receiving most of the income growth between 1979 and 2007.
What’s more, a new study by economist Emmanuel Saez at the University of California shows that in 2010—the first year of the economy’s recovery from the Great Recession—the top 1 percent captured 93 percent of the growth in income.
Learn more at Executive Paywatch ( http://www.aflcio.org/Corporate-Watch/CEO-Pay-and-the-99/ ).