CEO Pay in 2012 Was Extraordinarily High Relative to Typical Workers and Other High Earners | Economic Policy Institute

CEO Pay in 2012 Was Extraordinarily High Relative to Typical Workers and Other High Earners | Economic Policy Institute

"Depending on the CEO compensation measure, U.S. CEOs of major companies earned 20.1 or 18.3 times more than a typical worker in 1965; this ratio grew to 29.0-to-1 or 26.5-to-1 in 1978 and 58.5-to-1 or 53.3-to-1 by 1989 and then surged in the 1990s to hit 383.4-to-1 or 411.3-to-1 by the end of the recovery in 2000. The fall in the stock market after 2000 reduced CEO stock-related pay (e.g., options) and caused CEO compensation to tumble until 2002 and 2003. CEO compensation recovered to a level of 351.3 times worker pay by 2007, almost back to its 2000 level using the option-realized metric. The CEO-to-worker compensation ratio based on options-granted, however, returned only to 244.1-to-1 in 2007, still far below its height in 2000 (yet still substantially higher than the 1995 ratio of 136.8). The financial crisis in 2008 and accompanying stock market decline reduced CEO compensation after 2007–2008, as discussed above, and the CEO-to-worker compensation ratio fell in tandem. By 2012 the stock market had recouped much of the value it lost following the financial crisis. Likewise, CEO compensation has grown from its 2009 low, and the CEO-to-worker compensation ratio in 2012 had recovered to 272.9-to-1 or 202.3-to-1, depending on the measurement of options."