Even as the coronavirus pandemic forced pay cuts, furloughs and layoffs across the United States, a new survey of the highest-earning chief executives at public companies conducted by Equilar on behalf of the New York Times found that CEO pay in 2020 continued to soar, compared to employee pay.
- Of the 200 companies with the largest CEO pay packages included in the survey, 68% had larger gaps between CEO pay and worker pay in 2020 than they did before the pandemic.
- CEO pay rose 14.1% in 2020 from 2019, according to the New York Times, while median worker pay ticked up 1.9% during the same period.
- The New York Times attributes the jump in executive compensation to “pay for performance” corporate structures, which reward CEOs when a company’s stock goes up (the S&P 500 soared 16.3% in 2020), as well as generous stock award and grant packages that CEOs can receive even if their company is not yet performing well on the public market.
- The highest-paid CEO in the New York Times’ survey was Alexander Karp of data company Palantir, who took home $1.1 billion last year.
- Doordash’s Tony Xu was ranked second with $414 million in compensation and OpenDoor’s Eric Wu was ranked third with $370 million in compensation.
- Of the 13 female CEOs on the list, the highest paid was Dr. Lisa Su of chipmaker Advanced Micro Devices, who was paid $40 million in 2020.
8. That’s how many executives on the New York Times’ list of 200 earned more than $100 million in 2020, compared to just one in 2019.
This spring, Sen. Bernie Sanders (I-Vt.) and other lawmakers, including Sen. Elizabeth Warren (D-Mass.), introduced legislationthat would impose tax penalties on large corporations that pay their chief executives at least 50 times the pay of a median worker. “Corporate executives have padded their pockets with hefty paychecks and over-the-top compensation packages, while American workers, who helped generate record corporate profits, have hardly seen their wages budge,” Warren said in a statement.
Amid an ongoing national debate about whether unprecedented fiscal stimulus spending and generous supplemental unemployment benefits are stoking inflation and hurting the economic recovery, there’s some evidence that some workers are actually seeing pay gains this year. Across the country, many companies are raising wages to meet a huge surge in demand for workers as the economy reopens. According to data released last week by the Labor Department, average hourly earnings for employees on nonfarm private payrolls rose by 21 cents between March and April and 15 cents between April and May. “The data for the last two months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages,” the Labor Department’s report reads, but the agency also notes that the gains vary widely across industries.