CEO pay no longer rises with the stock market; it rises well in excess of the stock market—more than one-third faster, according to a new report by Economic Policy Institute (EPI) research director Josh Bivens and research assistant Jori Kandra. It’s still true that a typical pay package for the CEO of a major corporation outperforms whatever company the CEO happens to run. But in addition to that, it outperforms the entire frigging stock market.
You want to keep your retirement money safe? Sure, an index fund is a fine investment for now. But once we figure out how to corral America’s top CEOs into an initial public offering (IPO) and convert their collective persons into stock, pull your money out of that index fund and put it into CEOs, Inc. You won’t be sorry.That isn’t the first time EPI has reported that capitalists out-earn capital. It’s found CEO pay exceeding stock market growth for several years now. But we’ve all become so inured to outrageous stories about CEO pay that this finding didn’t attract much attention. I didn’t notice it until this past week.
The concept so astonished me that I checked EPI’s math. From 1978 to 2021 realized CEO compensation increased, EPI says, by 1,460.2 percent, adjusted for inflation. How does that compare to stock market performance? Well, from January 1978 to January 2021 the Dow Jones Industrial Average rose, adjusted for inflation (and assuming no dividend reinvestment) by 842.814 percent. The S&P 500 rose 904.378 percent. These rates of growth are impressive, but they are much slower than 1,460 percent.You Won’t Believe How Crazy CEO Pay Has Gotten Now | The New Republic