Pay raises remain elusive for typical American worker, but not for CEOs
Raises have remained elusive for American workers, but one elite slice of the workforce is seeing steady growth: the CEO.
Chief executives of major corporations saw their median pay jump 5% last year to nearly $10.3 million, a pickup from the 4% gain recorded in 2013, according to a report released Monday from benefits consulting firm Mercer.
The bump comes as executive pay faces increased scrutiny. This month, the Securities and Exchange Commission voted to require public companies to disclose the pay difference between their chief executive and the average worker, a gap that’s sure to be shocking to many.
A recent study from the Economic Policy Institute, a left-leaning think tank, showed that chief executives of large public companies saw their pay soar in recent decades.
That study said average CEO compensation was $16.3 million in 2014, an increase of 997% since 1978, compared with 10.9% growth for the typical worker.
Mercer said that the focus on CEO pay has caused firms to limit increases to fixed compensation. Base CEO salaries were little changed in 2014, while “long-term incentives are fueling overall pay increases,” Ted Jarvis, the company’s global director of executive compensation, said in a statement.
In its study, Mercer analyzed compensation totals for chief executives at 174 companies in the S&P 500. Pay tied to long-term incentives rose 6%, while short-term incentive pay climbed 4%.
Comparatively, American workers saw their wages grow 2.1% for the year ended July 31, according to Labor Department data.
Follow me on Twitter: @khouriandrew
Your guide to our new economic reality.
Get our free business newsletter for insights and tips for getting by.
You may occasionally receive promotional content from the Los Angeles Times.