Americans are tired of the pay gap between top executives and employees, as Elon Musk appears ready to break CEO pay standards
According to initial results of a poll conducted by Gallup University and Bentley, two-thirds of Americans believe companies are doing a poor job of closing the wealth gap between CEOs and ordinary employees.
The results have not yet been officially released, but the findings so far have revealed for the third year in a row that the vast majority of Americans believe that reducing the pay gap between CEOs and ordinary workers is not just a matter of important issue but also an issue that companies care about. The council is failing miserably to resolve it.
“CEO salaries are an insult. It’s brutal. And it severely undermines trust in our institutions,” said Nell Minow, vice president at ValueEdge Advisors. CNNwas the first company to report on the survey results.
In 2023, the average CEO of an S&P 500 company will earn 196 times more than the typical employee, up from 185 in 2022. About 83% of Americans told pollsters that businesses try to reduce the large gap between the average pay of senior executives and the pay of the average employee. At the same time, only 13% of respondents said companies are doing a good job controlling CEO pay.
But if public opinion on CEO pay seems overwhelming — and consistent, both year after year and across demographic groups — it doesn’t seem to have much impact.
Average compensation packages for S&P 500 CEOs rose nearly 13% last year, even as wages and benefits for private-sector workers rose just over 4%. according to AP’s annual compensation survey. The survey results were analyzed for AP by equivalentfound that the average salary of CEOs increased to $16.3 million including cash and stock-based awards, while the average employee at an S&P 500 company earned $81,467.
“Instinctively, it seems unfair. How can a CEO earn 196 times more than an average worker?” said Cynthia Clark, professor of management at Bentley University CNN.
The new findings also show that political party affiliation is not a major factor in how Americans view the pay gap between CEOs and employees. In the survey, 96% of Democrats said reducing the wage gap is important. Republicans, although not as enthusiastic, still majority think this issue is important (66%).
CEO pay is “an issue that cuts across politics,” said Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies. Luck. In fact, she said it could even be a factor behind a resurgence of organized labor activism in 2023, as dissatisfaction with corporate profits moves to the top of the ladder. Wages are boiling at major unions such as Auto workers united.
“After the pandemic, the idea that a person in a corner office is worth hundreds of times more than frontline workers, many of whom are doing essential jobs to keep our economy going we keep growing — people don’t buy that anymore,” Anderson said Luck.
The Gallup-Bentley findings aren’t the first poll this year to show bipartisan disdain for CEO pay.
An April poll by Data for Progress asked respondents how they would feel about implementing a law that would increase taxes on companies that pay their CEOs at least 50 times the median employee salary. The results showed overwhelming approval from both Republicans and Democrats.
Bills like the one put forward by the pollsters were float first in both chambers of Congress, including one introduced this year by Sens. Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts called Tax Excessive CEO Pay Act.
But Anderson said that type of legislation has stalled because corporate lobbyists continue to insist that CEOs of large corporations are almost solely responsible for shareholder value. The talent pool for top executives is extremely competitive, and if they don’t pay, CEOs will move on to other companies.
“I think most Americans now really understand that argument and understand that employees at any salary level are making valuable contributions to these companies,” Anderson said. “It says a lot about someone who really has a strong voice in Washington. The corporate lobbies that are still pushing that outdated idea still have a lot of say.”
All this comes as Tesla shareholder approved today The largest pay package in history for CEO Elon Musk at $56 billion.
“Shareholders are the group that has to decide on pay packages,” says Bentley professor Cynthia Clark. Luck in an email. “The biggest concern about Musk’s prize is not what he will do if he doesn’t get it, which is heavily covered in the news, but what will happen to other CEOs and pay rates if he gets it.”
Anderson said Luck that Musk’s pay package offers an interesting look at other mechanisms for dominating CEO pay. In January, a Delaware judge vetoed Musk’s payment due to corporate governance issues and some major institutional investors, including California’s two public pension plans, opposed the deal ahead of today’s vote.
“It is encouraging to see some major institutional investors stand up against this obscene pay package that was approved by his brother and his divorce lawyer, as well as others with connections,” Anderson said. close relationships with executives.” “But there is a really big barrier to winning a majority against pay packages at companies.”
