Since 1978, CEO Pay Has Grown 940.3% While Average Worker Pay Is Up Just 11.9%

CEOs now take home $278 for every $1 earned by the typical worker, according to the Economic Policy Institute.

The gap between compensation for America’s corporate leaders and the workers they employ has grown exponentially in the past few decades, according to a report from the Economic Policy Institute.

CEO pay has risen 940 percent since 1978, while over the same period, the average worker has seen a mere 12 percent increase in pay.

"CEOs are getting more because of their power to set pay, not because they are increasing productivity or possess specific, high-demand skills," wrote economist Lawrence Mishel and research assistant Julia Wolfe.

CBS News noted that the report shows average CEO pay at the country’s largest 350 companies was $17.2 million last year. For every $1 earned by the average worker, CEOs got $278.

For comparison, in 1965, the nation’s top CEOs earned $20 for every dollar earned by a worker. In 1989, those numbers became 58-to-1.

What fueled this dramatic increase?

According to Mishel and Wolfe, the rise is “due to a shift in the 1990s and 2000s to compensate CEOs mostly with stock options, restricted shares and other incentive-based pay fueled a spike in their earnings.”

The EPI report suggested remedies to address the ever-growing income gap that include “reinstating higher marginal income tax rates at the very top and setting higher corporate tax rates on companies with higher ratios of CEO-to-worker compensation.”

Read the full report.

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