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CEO-Worker Pay Gap Widens—And Employees Aren’t Happy About It


If you thought the pandemic might have made a dent in the wealth gap between CEOs and rank and file workers, you’d be wrong. In fact, average CEO pay increased 31% over the last three years while median pay rose 11%.

That’s according to recent rankings of compensation from JUST Capital, a nonprofit that ranks large publicly traded companies on their performance in such issues as governance and labor policies.

With those findings in mind, the organization set out to explore American’s views of CEO pay. The bottom line: Most Americans say that the growing CEO-worker pay gap is a problem.

“People, regardless of ideology, see that CEO pay is too high,” says Alison Omens, chief strategy officer at JUST Capital.

Disparities Grow

Certainly, Just Capital’s latest rankings of large companies found that the pandemic did nothing to stem the increase in CEO compensation. In fact, the average CEO-to-median -worker pay ratio as of 2020 is 235:1, up from 212:1 three years before.

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The other side of the coin: an April report from Brookings that surveyed 22 companies employing more than 7 million frontline workers. It found that only one-third pay at least half their employees a living wage. Company shareholders were rewarded five times more than workers.

Mind the Gap

In February, researchers at polling company SSRS, which conducted the survey, interviewed over 1,000 U.S. adults to investigate their opinions about the state of CEO compensation, what companies should be doing about the CEO-worker pay gap and whether they think workers are undervalued by companies.

Some findings:

· Almost nine in 10 (87%) agree that the growing gap between CEO pay and worker pay is a problem in this country.

· 72% say that companies should have CEO compensation caps, regardless of performance.

· 85% agree that one way America’s largest companies can meaningfully act to reduce income inequality is by raising their minimum wage to a living wage.

· 81% believe large corporations are responsible for ensuring the basic financial security of their lowest-paid workers.

· 80% say the recent wave of worker strikes and support for labor unions are seeking to address the fact that large corporations have undervalued employees for too long.

“Pay levels are an indicator for people of how a CEO is treated vs. how workers are treated in a company,” says Omens.

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The survey also revealed that Americans are pretty well-informed about the current state of CEO pay. Researchers questioned a control group, which didn’t see any statistics beforehand, and another group that did. On the whole, responses were similar. Among the former, 73% said that most CEOs of America’s largest companies are compensated too much vs. 13% who responded they are paid the “right amount.” Among the latter, 79% felt the pay level is excessive vs. 10% who said they receive an acceptable sum.

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