By Alexia Fernández, Jun 26, 2019, 8:20am (VOX)
After years of kicking and screaming, corporate executives have finally released pay data on what their CEO makes versus their median worker.
Unsurprisingly, the gap is obscene. The average chief executive of an S&P 500 company earned 287 times more than their median employee last year, according to an analysis of the new federal data released Tuesday by the AFL-CIO labor federation. America’s CEOs earned a staggering $14.5 million in 2018, on average, compared to the average $39,888 that rank-and-file workers made. And CEOs got a $500,000 bump compared to the previous year, while the average US worker barely got more than $1,000.
This is the first year in which all public companies were required to disclose CEO-to-workers pay ratios in filings with the US Securities and Exchange Commission. Before, companies only needed to report compensation for their top executives.
The new disclosures — largely opposed by corporate America — are part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The purpose is to provide shareholders with more information to judge corporate behavior — and to shame executives for their excessive pay.
Vox’s Ezra Klein put it this way:
“Consider that for much of the post–World War II era, paying your CEO a lot of money didn’t make much sense because the government would simply tax it all away. Top marginal tax rates on income were above 90 percent. President Ronald Reagan’s tax cuts sent those top rates tumbling, and so a CEO who could negotiate a much bigger salary could also keep a much bigger salary.”