Americans are fed up with the pay gap between CEOs and workers, as Elon Musk looks set to crack down on CEO pay standards.
Two-thirds of all Americans believe that companies are doing a bad job of managing the wealth gap between CEOs and ordinary workers, according to preliminary results of a survey conducted by Gallup and Bentley University.
The results have not been officially released, but the findings so far show for three years in a row that a majority of Americans believe that reducing the pay gap between CEOs and ordinary workers is not only important, but also an issue that affects companies. boards fail miserably to fix.
“The CEO’s salary is outrageous. It is brutal. And it seriously undermines confidence in our institutions,” said Nell Minow, vice chairman of ValueEdge Advisors, told. CNNwhich was the first to report on the findings of the survey.
In 2023, the average CEO of an S&P 500 company earned 196 times more than the average worker, up from 185 in 2022. Some 83 percent of Americans told voters it was somewhat or very important for businesses to try to narrow the gaping chasm. average salary for top management and pay for middle workers. At the same time, only 13% of respondents said companies are doing a good job of keeping CEO pay under control.
But if public perception of CEO pay seems too high—and consistent, year after year and across demographics—it doesn’t seem to have much of an impact.
Median compensation packages for S&P 500 CEOs rose nearly 13% last year, as wages and benefits for private sector workers increased just over 4%, according to the AP’s annual compensation survey. The results of the survey, analyzed by AP by Equilar, showed that average CEO pay rose to $16.3 million including cash and stock-based awards, while the average employee at an S&P 500 company earned $81,467.
“Naturally, it doesn’t seem fair. How can a CEO make 196 times more than the average worker?” Cynthia Clark, a professor of management at Bentley University, told CNN.
The new findings also showed that political party affiliation was not the most important factor in how Americans viewed the pay gap between CEOs and workers. In this survey, 96% of Democrats said reducing the wage gap is important. Republicans, while less enthusiastic, still overwhelmingly say the issue is important (66%).
CEO pay is “an issue that cuts across politics,” Sara Anderson, director of the Global Economy Project at the Institute for Policy Studies, said. Good luck. In fact, he said it could be the trigger for a resumption of organized labor in 2023, as dissatisfaction with company profits rising to the top of the pay scale boiled over in major unions like the United Auto Workers.
“Coming out of this pandemic, the idea that one person in the corner office is worth hundreds of times more than the previous workers, many of whom were doing important work to keep our economy going – people are not buying that anymore,” Anderson said. he told Good luck.
The Gallup-Bentley findings aren’t the first polls this year that have shown bipartisan disdain for CEO pay.
An April poll by Data for Progress asked respondents how they would feel about implementing legislation that would raise taxes on companies that pay their CEOs at least 50 times the average worker’s salary. The results showed overwhelming approval from both Republicans and Democrats.
Bills like this one presented by voters have been floated before in both chambers of Congress, including one introduced this year by Sens. Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts called the Overpayment of Taxes Act.
But Anderson said that kind of legislation has stalled because corporate lobbyists continue to argue that CEOs of large companies are likely to be held accountable for the number of shareholders. Top management talent is incredibly competitive, and if they don’t pay, CEOs will go to other companies that will.
“I think most Americans really see that conflict now, and they understand that workers moving up the pay scale are contributing a lot to these companies,” Anderson said. “It says a lot about who really has the strongest voice in Washington. Those hospitality groups that are still pushing that outdated idea have a lot to say.”
All of this comes as Tesla shareholders today approved the largest package in CEO Elon Musk’s history at $56 billion.
“Shareholders are the group that should decide the packages,” said Bentley professor Cynthia Clark. Good luck in the email. “The biggest concern about Musk’s award is not what he will do if he doesn’t get it, which is being talked about in the news, but what will happen to other CEOs and salary ranges if he does get it.”
Anderson told Good luck that Musk’s pay package offered an interesting look at the alternatives to CEO pay. In January, a Delaware judge blocked Musk’s payout due to corporate governance issues, and many institutional investors, including two California public pension systems, came out against the deal ahead of today’s vote.
“It’s encouraging to see major institutional investors taking action against this disgraceful fund endorsed by his brother and his divorce attorney, and these other people who have such good relationships with management,” Anderson said. “But there is a very big hurdle to getting more votes against corporate packages.”
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