Last year saw the smallest increase in CEO pay since 2015, following 17% pay increases in 2021. To put it another way, the average pay of S&P 500 CEOs rose last year by substantially more than the average annual pay of workers at those companies. The chief executives at those companies got a median of $14.8 million in compensation in 2022, the AP reports. At that pay level, their 0.9% raise was over $130,000. Compare that with what the average worker in the U.S. makes in an entire year.
But it’s the smallest increase these CEOs have gotten in years: Between 1978 and 2020, compensation for the CEOs at the largest public firms shot up by 1,322%, so 0.9% is a major comedown. Break out the tiny violins for the most mournful dirge you know, right? Multimillionaire CEOs had such a hard year in 2022. Private sector workers across the board got a higher percentage pay raise than CEOs—and even if it still didn’t keep up with inflation, things just aren’t supposed to happen that way in the United States economy of the past 50 years.
In 2021, a record share of earnings were above the Social Security tax threshold. People only pay into Social Security up to a set cap—$160,200 in 2023—which means that the highest-income people are only contributing to Social Security for a few months of the year. Back in 1983, that cap was set so that 90% of all income would be included. It’s never been that high since, but in 2021, with income over $142,800 exempted from Social Security taxes, the amount of income under the cap fell to 81.4%. That’s because the growth at the top—not just CEOs but directors and vice presidents and counsels and car dealers and surgeons—was outpacing everyone else. In 2021, the same year that record share of earnings was above the Social Security cap, 26 states and the District of Columbia had lower median household incomes than they’d had in 2019, according to the U.S. Census Bureau.
Last year also saw record corporate stock buybacks, with corporate profits being directed to wealthy shareholders and feeding executive bonuses rather than being invested in workers or strengthening the business and the value it provides to customers.
While the rest of the population tries to sock money away into a 401(k), with a maximum annual contribution of $22,500 ($30,000 for people over 50), top corporate executives get to have unlimited tax-deferred compensation accounts. According to a recent report from the Institute for Policy Studies, Walmart CEO Doug McMillon has $169 million in his deferred compensation account. His monthly retirement check will be more than $1 million a month, while 46% of Walmart workers have nothing in their 401(k) accounts, and workers in their 80s are relying on TikTok contributions for retirement. And McMillon isn’t the only executive who can expect monthly retirement income totaling more—far more—than his company’s average worker is paid in a year.
Of course, we can’t talk about economic inequality without a reminder that the federal minimum wage has been stuck at $7.25 an hour since 2009, well below the poverty threshold for a family of two.
It’s in this context that a piddling 0.9% raise for CEOs amounts to almost double the median household income in the United States, yet still looks like progress. But don’t expect a repeat of even this teeny tiny victory over rising inequality next year.
We have Rural Organizing’s Aftyn Behn. Markos and Aftyn talk about what has been happening in rural communities across the country and progressives’ efforts to engage those voters. Behn also gives the podcast a breakdown of which issues will make the difference in the coming elections.
