CEO-Employee Pay Gap Widens in 2023: CEOs Earn 196 Times More Than Average Workers

CEOs are pulling in substantial compensation packages amid the flourishing US stock market. Historically, executives have earned higher incomes than their employees, a trend that continues to widen. According to an analysis by Equilar and The Associated Press, the median CEO within the S&P 500 earned 196 times the median employee’s pay in 2023, up from 185 in 2022. This growing chasm is fuelled by the notable acceleration in CEO pay, closely linked to stock prices, outpacing employee compensation. Consequently, many employees are grappling with the challenge of keeping up with the rising cost of living. The surge in 2023 was particularly notable, with median total compensation for S&P 500 CEOs, including stock awards, reaching $16.3 million—a staggering year-over-year increase of 12.6%, compared to just 0.9% in 2022.
While workers also experienced income growth, it was at a considerably slower rate. The median S&P 500 employee earned $81,467 last year, reflecting a 5.2% increase from 2022. To illustrate, this translates to an annual pay raise of approximately $4,300 for workers, whereas CEOs received an additional $1.5 million.