Research shows income gap increases between CEOs, employees in US
(MENAFN) A recent analysis conducted by the Associated Press (AP) in collaboration with Equilar, a business intelligence firm, has shed light on the widening income gap between chief executives and workers in America's largest companies. The study reveals that CEOs of firms listed in the S&P 500 experienced a substantial increase in their compensation packages compared to their employees' earnings, exacerbating concerns over income inequality in the United States.
According to the data, the median total compensation for CEOs in the S&P 500 surged by 12.6 percent to a staggering USD 16.3 million in 2023. Meanwhile, the median earnings of S&P 500 employees saw a more modest rise of 5.2 percent, reaching just under USD 81,500. These compensation packages encompass various components such as salary, bonuses, stock options, and other forms of remuneration typically received by top executives.
The disparity in income is starkly exemplified by the exorbitant compensation awarded to some CEOs. Hock E. Tan of semiconductor developer Broadcom topped the list, earning a staggering USD 161.8 million in 2023. William J. Lansing of Fair Isaac Corporation and Tim Cook of Apple followed closely behind, receiving total compensation of USD 66,349,962 and USD 63,209,845 respectively.
The study attributes the surge in CEO compensation to mounting pressure on corporate boards to retain top talent by continuously increasing pay packages for high-performing executives. This trend has resulted in a significant escalation of income inequality within corporate America, with top managers now earning approximately 200 times more than their average workers.
Remarkably, this disparity represents a stark departure from historical norms. Until the 1980s, CEOs typically earned around 40 to 50 times the average worker's pay, highlighting the profound shift in corporate compensation practices over the past few decades.
As debates surrounding income inequality continue to intensify, the findings underscore the urgent need for reforms aimed at addressing systemic inequities and ensuring fair compensation practices within corporate structures. The widening chasm between CEO and worker earnings serves as a sobering reminder of the challenges posed by escalating economic disparities in contemporary society.
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