The CEO-to-worker pay gap is widening yet again, as top executives who took pandemic pay cuts more than recovered lost earnings in the last year.
CEOs made 254 times more than the average worker in 2021, up 7% from the year prior, according to the Equilar 100, which offers an early look at CEO compensation among the largest companies by revenue that filed 2021 proxy statements by March 31.
In 2021, median CEO compensation reached $20 million, a 31% increase from the year prior, due to big jumps in stock awards and cash bonuses based on market performance and company productivity. CEO pay consists of wages, as well as extremely lucrative bonuses, long-term incentives and, most importantly, stock options, which comprise around 85% of CEO compensation, according to Lawrence Mishel, a distinguished fellow at the Economic Policy Institute.
For comparison, CEO pay decreased by just 1.6% between 2019 and 2020 due to pandemic cuts, from $15.7 million to $15.5 million.
Median worker compensation at Equilar 100 companies rose from $68,935 in 2020 to $71,869 in 2021, a roughly 4% increase. Equilar says this bump is due in part to companies that offered bonuses and other cash payouts in the recovering pandemic economy that saw increased consumer demand and a tightened supply of workers.
