CEOs now make 271 times what the average worker makes
It pays to be top dog.
In 2016, CEOs in America’s largest companies made an average of $15.6 million — or 271 times what the average worker made, according to a report released Thursday from the Economic Policy Institute. While this is down slightly from last year, it’s still “light years beyond” the 20-to-1 ratio in 1965 and the 59-to-1 ratio in 1989.
Some CEOs are raking it in more than others. The highest paid CEOS in 2016 include Thomas Rutledge of Charter Communications, who raked in $98 million; Leslie Moonves of CBS at $68.6 million and Robert Iger at Disney who made $41 million.
So why are CEOs making bank these days? EPI believes “CEOs are getting more because of their power to set pay, not because they are more productive or have special talent or have more education” [than in the past], the report notes.
What’s more, economist Lawrence Mishel tells Moneyish that, “CEO pay, in my view, has been one of the main drivers of the escalation of income of the top 1% and the top 0.1%.”
Of course, Mishel does work for the left-leaning EPI, and other experts have other theories about why the 1% is getting so much richer than the rest of America. Indeed, as the Washington Post notes, the “why” answers on this debate tend to fall into two camps: “One believes that people at the top have used their positions of influence to lock in excessive earnings,” journalist Lydia DePillis writes. “The other thinks that people with scarce and unique talents have simply been able to command a premium in markets that have gotten bigger over time.”
Whichever camp is right — or even if there’s another explanation entirely — it’s hard to argue with the fact that the top 1% of income earners in America are getting richer. Indeed, in the 1970s the top 1% of income earners in America made up less than 10% of all the income earned in this country; in recent years, they’ve made more than 20% of all the income.
© 2018 Dow Jones & Company, Inc. All Rights Reserved