The average compensation for CEOs of major U.S. companies last year was 354 times larger than the typical American employee’s annual pay, according to the nation’s largest labor organization.
The AFL-CIO said Monday that the gap between average chief executives’ and rank-and-file workers’ pay — $12.3 million vs. $34,645 — is the widest in the world. The ratio of CEO-to-worker pay is 148 in Switzerland, 147 in Germany, 84 in the United Kingdom and 67 in Japan, said the umbrella group for labor unions.
In Georgia, the average CEO pay of 23 large companies that have disclosed executive compensation so far was $9.4 million last year.
The Business Roundtable, a Washington, D.C.-based organization of CEOs at major companies, defended executive compensation practices, saying most boards of directors have tied top executives’ pay to “demanding and challenging” targets for the financial performance and growth of their firms.
“Employees benefit through job creation, job security, increased compensation, opportunities for advancement and a positive workplace environment,” the Business Roundtable said in an e-mailed response.
AFL-CIO President Richard Trumka said American CEOs “continued to do very well for themselves last year, while workers struggle to make ends meet.”
Trumka was paid $301,932 last year — about nine times the average worker’s wages.
The relative growth of CEO pay — it averaged 42 times the typical employee’s pay 30 years ago — became a controversial political issue during the Great Recession. Federal lawmakers enacted the Dodd-Frank act in 2010, which requires companies to give shareholders a non-binding vote on whether they approve top executives’ compensation packages.
The AFL-CIO’s CEO-worker pay ratio is based on recent executive pay disclosures by firms in the Standard & Poor’s 500 index, as well as average worker pay figures from U.S. Bureau of Labor Statistics data.
AJC reporter Russell Grantham is tracking what Georgia’s major public companies pay their top executives. Look for periodic news and trend stories in the weeks ahead, as well as up-to-date statistics, as Grantham pores through this year’s corporate proxy statements.