CEO Pay Jumps 27 Percent, Everyone Else's Up Just 2 Percent CEO Pay Jumps 27 Percent, Everyone Else's Up Just 2 Percent
The GOOD Life

CEO Pay Jumps 27 Percent, Everyone Else's Up Just 2 Percent

by Alex Goldmark

April 6, 2011

USA Today crunched some numbers late last week and determined American workers are getting a raw deal, at least if you feel average employee pay should have anything to do with CEO compensation.

CEO pay jumped somewhere between 27 and 31 percent depending on which group of CEOs you look at. The average worker got a raise of just 2.1 percent according to government statistics, barely above inflation (PDF).

The Wall Street Journal took the average of 50 top U.S. companies and found a 30.5 percent average increase in CEO pay. USA Today used a bigger sample of nearly 200 companies collected in GovernanceMetrics International data to arrive at a 27 percent estimate. USA Today:

CEOs’ 2010 median pay jumped 27 percent from $7.1 million in 2009, one of the largest increases in recent history. The jump was a complete reversal from 2009 and 2008, when most CEOs took a pay haircut. The growth in CEOs’ median pay topped the median 21 percent total return that investors would have collected if they owned shares of the companies in the compensation analysis.

This is part of a decades long trend of CEO pay raises outpacing average worker pay. In the 1960s, when the American economy was centered more around manufacturing, CEO pay was about 24 times the pay of the average worker, according the labor-funded Economic Policy Institute. The ratio had reached more than 200:1 by 2006, the latest data posted on their website. Maybe it's time for a new calculation.

Image: (cc) by Flickr user bigburpsx3.

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CEO Pay Jumps 27 Percent, Everyone Else's Up Just 2 Percent