We examined compensation over the past year at the 300 publicly held U.S. corporations that had the lowest median wages in 2020.
The CEO-worker pay gap at low-wage corporations grew even wider in 2021.
At 106 of the 300 firms we studied, median worker pay did not keep pace with inflation.
The average gap between CEO and median worker pay in our sample jumped to 670 to 1, up from 604 to 1 in 2020. Forty-nine firms had ratios above 1,000 to 1.
CEO pay at these 300 firms increased by $2.5 million to an average of $10.6 million, while median worker pay increased by only $3,556 to an average of $23,968.
Two-thirds of low-wage firms that cut worker pay in 2021 spent billions on stock buybacks. Of the 106 companies in our sample where median worker pay did not keep pace with inflation, 67 spent money on stock buybacks, a maneuver that inflates executive stock-based pay. These repurchases totaled $43.7 billion.With the $13 billion Lowes alone spent on share repurchases, the company could have given each of its 325,000 employees a $40,000 raise. Instead, its median pay fell 7.6 percent to $22,697.
Taxpayer dollars are fueling corporations with extreme CEO-worker pay gaps.Of the 300 companies in our sample, 40 percent received federal contracts between October 1, 2019 and May 1, 2022. The combined value of these contracts was $37.2 billion.At these low-wage contractors, the average CEO-worker pay ratio hit 571 to 1 in 2021. Only 6 of the 119 contractors had pay gaps of less than 100 to
Policy solutions for runaway CEO pay do exist — and enjoy broad support.Some 62 percent of Republicans and 75 percent of Democrats support an outright cap on CEO pay relative to worker pay.
While a hard cap is unlikely, other CEO pay reforms have also gained traction in recent years. These reforms focus on three key areas: CEO pay ratio incentives for federal contractors, Excessive CEO pay taxes, Stock buyback restrictions and taxesExecutive Excess 2022 – Institute for Policy Studies