American CEOs were paid 299 times more than the average worker in 2020

Union group AFL-CIO’s annual report on executive pay shows big leap in CEO compensation despite pandemic

The disparity between CEO and employee pay continued to grow during 2020 (Getty Images)

The difference between the average pay of CEOs and their employees grew in 2020 as the Covid-19 pandemic upended traditional working life.

According to union group AFL-CIO’s annual Executive Paywatch report, CEOs of S&P 500 companies made 299 times the average worker’s salary.

On average, executives received $15.5m in total compensation, an increase of $260,000 per year over the past decade.

Production and non-supervisory workers earned $43,512 on average in 2020, up just $957 a year over the last 10 years.

During the pandemic, the average compensation for executives grew by $712,720 with the ratio of CEO-to-worker pay jumping from 264:1 in 2019.

The findings came as no surprise to the AFL-CIO.

Secretary-treasurer Liz Schuler told reporters on Wednesday: “This is consistent with what we’ve been seeing year to year.”

“Inequality, the imbalance in our economy, is clear by this report that the pay of CEOs and working people continues to be a major problem in this country.”

The greatest disparity in pay between executives and workers was found to be at automotive technology firm Aptiv which has a 5,294:1 ratio between CEO Kevin Clark, whose total compensation was $31m, and the median employee pay of just $5,906.

Paycom Software CEO Chad Richison had the largest compensation package in 2020 of $211,131,206. The median worker pay for the company was $71,259, meaning a ratio of 2,963:1.

Some of the greatest disparities in pay came in the consumer staples and consumer discretionary sectors – retailers, many of which deemed their workers essential during the pandemic to keep the economy ticking over and Americans supplied with what they needed during lockdowns.

“The only reason we’re reaching the other side of the Covid-19 pandemic is because working people stepped up,” said Ms Schuler.

“We hear so many business leaders calling these workers essential and calling them heroes, but words are not enough,” she added. “We have always been essential, doing the critical work to make this country hum.”

The disparity between the pay of executives and their employees was brought into sharp focus during the 2008 global financial crisis when the government mandated that companies had to publish compensation data.

Executive pay goes beyond a basic salary and includes many other forms of compensation, from stocks to bonuses, retirement plans, and performance-based payments.

During the pandemic, some CEOs announced that they were foregoing their salaries or take large pay cuts to demonstrate solidarity with workers as the economy ground to a halt.

However, in many cases, it seems that other forms of compensation made up for any shortfall in total remuneration.