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The CEOs of S&P 500 corporations earned a mean of $18.3 million final 12 months — a rise of 18.2% and greater than double the U.S. inflation price, in keeping with a brand new report from the AFL-CIO.
The union’s annual report on government compensation, which has change into a benchmark for rising inequality within the U.S., discovered that the ratio between CEO pay and employee earnings reached 324-to-1 final 12 months, up from 299-to-1 in 2020 and 264-to-1 in 2019.
The findings underscore the monetary stress that many employees at the moment are experiencing as a consequence of inflation, which is outpacing typical wage progress. Though the pay of common employees pay rose 4.7% final 12 months, after inflation their actual earnings fell 2.4%. In contrast, CEOs stored nicely forward of final 12 months’s inflation price of seven.1%.
“It is one other model of ‘extra for them and fewer for us’,” stated AFL-CIO Secretary-Treasurer Fred Redmond in an announcement in regards to the findings. “And it comes at a time when working folks’s residing requirements have declined with each enhance within the value of meals, hire and fuel.”
The report additionally pointed “greedflation” as a reason behind surging CEO pay. Some consultants blame company profit-taking, particularly as some corporations enhance costs even larger than their underlying prices, as a driver of inflation.
“Throughout the pandemic, the ratio between CEO and employee pay jumped 23%,” Redmond stated. “As an alternative of investing of their workforces by elevating wages and conserving the costs of their items and companies in examine, their resolution is to reap document earnings from rising costs and trigger a recession that can put working folks out of our jobs.”
$296 million paycheck
The everyday CEO is bolstering their pay with compensation by inventory choices, restricted inventory and non-equity incentives. As an example, the common CEO wage stood at about $1.2 million final 12 months, however the typical restricted inventory award amounted to virtually $10 million.
The highest-earning CEO final 12 months amongst S&P 500 companies was Expedia’s Peter Kern, whose pay was greater than $296 million, in keeping with the AFL-CIO’s calculations. In second place was Amazon CEO Andrew Jassy, with compensation of greater than $212 million.
Expedia and Amazon did not instantly reply to a request for remark.
The AFL-CIO singled out Amazon as having the best hole between CEO-to-worker pay, at 6,474 to 1. Whereas Jassy’s compensation stood at greater than $212 million final 12 months, the everyday Amazon employee earned lower than $33,000 yearly in 2021, the union stated.
Amazon’s warehouses have been the middle of unionization efforts, with some successes and a few losses. The massive hole between typical Amazon employee pay and its CEO underscores why a few of its employees are organizing union drives, the AFL-CIO stated.
“However working individuals are beginning to battle again towards the economics of greedflation,” Redmond stated. “From Bessemer, Alabama to Staten Island, New York, Amazon employees are coming collectively to type unions and negotiate for a good return on their work.”
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