CEOs of companies listed on the S&P 500 earned an average of $18.8 million last year, up about 21% from the previous year, Time Magazine recently reported. This jump in executive pay came despite an 18% drop in the market index in 2022.
Many of these CEOs were gifted generous stock options by their boards as a reward for steering their companies through the challenges of the coronavirus pandemic. But the ratio of CEO pay to the typical earnings of company employees has been trending upwards for decades, due largely to an increase in the use of stock-based compensation.
According to an analysis last year by the Economic Policy Institute, the heads of the top 350 publicly traded companies earned annual incomes that were on average 399 times greater than a typical worker in 2021, up from 59-to-1 in 1989. This means that some executives’ pay is significantly greater than 399 times their employee’s pay. In fact, the heads of 22 S&P 500 companies earn at least 1,000 times more than what their typical workers take home. (See if some of these companies are also among the companies planning the biggest mass layoffs this year.)
To find the CEOs that are paid at least 1,000 times more than their employees, 24/7 Wall St. reviewed the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) list of Company Pay Ratios among companies in the S&P 500 index. Only companies headquartered in the U.S. were considered. Information on industry, 12-months trailing revenue, and number of full-time employees came from Yahoo! Finance.
Take for example Walmart Inc. CEO C. McMillon, who earned $25.7 million in 2022, or 1,013 times the $25,335 median income of a Walmart employee. The world’s largest retailer, which was founded in 1945 and employs 2.1 million workers, has the lowest CEO-to-worker pay ratio of these 22 companies. (Also see, these companies control over 50% of their industry.)
Amazon.com CEO Andrew Jassy tops this list, by a long shot. Jassy collected $212.7 million in 2021, nearly 6,500 times greater than the typical Amazon employee pay of $32,855. To put it another way, Jassy makes in one hour more than three times the annual income of a typical Amazon employee (Jassy’s equivalent hourly pay is $102,260 based on a 40-hour work week).
The median CEO-to-worker pay ratio of these 22 companies is 1,687-to-1. The median annual revenue among these companies is $29.9 million
Annual CEO pay on this list starts at $10.6 million for tobacco company Philip Morris International CEO Jacek Olczak, who in 2021 earned 1,055 times the median pay of $18,196 for Philip Morris’ 79,800 employees. The highest CEO pay, at $296.2 million, went to Peter Kern, head of online travel services provider Expedia.com, who in 2021 earned 2,897 times the median income of $102,270 of the 16,500 Expedia employees.
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