A global pandemic. Nationwide lockdowns. An economy in free fall. 2020 was a brutal year – unless you were a CEO.
According to data prepared by Equilar for The Associated Press, the median salary for CEOs of companies listed in the S&P 500 was $12.7 million last year. That represents a 5% raise from 2019 and outpaces the most recent year-over-year increase.
Workers, on the other hands, received just a 2.6% bump in their wages and benefits – if they weren’t one of the millions of Americans who were laid off. According to the Pew Research Center, 15% of Americans adults say they lost their jobs during the pandemic.
“This should have been a year for shared sacrifice,” Sarah Anderson, who directs the global economy project at the left-leaning Institute for Policy Studies, told The Associated Press. “Instead it became a year of shielding CEOs from risk while it was the frontline employees who paid the price.”
The AP reports that many corporate boards waived performance metrics in order to boost executive compensation. Consider, for example, Advance Auto Parts CEO Tom Greco:
Extended sick-pay benefits and expenses for hand sanitizer and other safety equipment totaling $60 million dragged on two key measurements that help set his performance pay. But because the board’s compensation committee saw these costs as extraordinary and unanticipated, it excluded them from its calculations. That helped Greco’s total compensation rise 4.7% last year to $8.1 million.
A study published earlier this month by The Institute for Policy Studies resonates with the AP report. The think tank studied 100 S&P 500 companies and found that 51 one of them “bent their own rules to pump up executive paychecks.”
At these 51 companies, according to the study “CEO pay averaged $15.3 million, up 29 percent over 2019, while median worker pay dropped 2 percent, to a $28,187 average. The CEO-worker pay ratio at these 51 firms averaged 830 to 1.”