CEO Pay Rising Out of Control

Historic corporate profits, profiteering corporations and runaway CEO pay have created the perfect storm for “greedflation,” according to this year’s AFL-CIO Executive Paywatch website, unveiled this morning by AFL-CIO Secretary-Treasurer Fred Redmond.

The Executive Paywatch website, the most comprehensive, searchable online database of CEO pay and CEO-to-worker pay ratios, shows that CEOs of S&P 500 Index companies received, on average, $18.3 million in total compensation in 2021. The average S&P 500 Index company CEO-to-worker pay ratio is now 324-to-1, up from 299-to-1 in 2020 and just 264-to-1 in 2019.

Runaway CEO pay is a symptom of “greedflation,” when companies increase prices to boost corporate profits and create windfall payouts for corporate CEOs. In 2021, corporate profits broke records and CEOs made a fortune during the pandemic. Average S&P 500 Index company CEO pay rose 18.2% in 2021, faster than the U.S. inflation rate of 7.1%.

Wall Street elites have been quick to blame workers’ wages and low unemployment for causing inflation. But in reality, U.S. workers’ earnings actually fell behind inflation, rising just 4.7% in 2021. In real terms, average hourly earnings fell 2.4% last year after adjusting for inflation.

“During the pandemic, the ratio between CEO and worker pay jumped 23%,” said Redmond during a press conference for the website’s release.