Even when regular workers win their biggest raises in decades, they look minuscule compared with what CEOs are getting. The typical compensation package for chief executives who run S&P 500 companies soared 17.1% last year, to a median $14.5 million, according to data analyzed for the AP by Equilar. That leap was the biggest since a 23.9% surge for 2010 compensation packages, according to the data analyzed by Equilar. The gain towers over the 4.4% increase in wages and benefits netted by private-sector workers through 2021, which was the fastest on record going back to 2001. The raises for many rank-and-file workers also failed to keep up with inflation, which reached 7% at the end of last year.
CEO pay took off as stock prices and profits rebounded sharply as the economy roared out of its brief 2020 recession. Because much of a CEO's compensation is tied to such performance, their pay packages ballooned after years of mostly moderating growth. In many of the most eye-popping packages—such as Expedia Group's, valued at $296.2 million, and JPMorgan Chase's $84.4 million—boards gave particularly big grants of stock or stock options to recently appointed CEOs navigating their companies through the pandemic, or to established leaders they wanted to convince to hang around.
The CEOs often can't cash in on such stock or options for years, or possibly ever, unless the company meets performance targets. But companies still must disclose estimates for how much they're worth. Only about a quarter of the typical pay package for all S&P 500 CEOs last year came as actual cash they could pocket. Whatever its composition, the chasm in pay between CEOs and the rank-and-file workers they oversee keeps widening. At half the companies in this year's pay survey, it would take the worker at the middle of the company's pay scale at least 186 years to make what their CEO did last year. That's up from 166 a year earlier.
The AP and Equilar's compensation study included pay data for 340 CEOs at S&P 500 companies who've served at least two fiscal years at their companies, which filed proxy statements between Jan. 1 and April 30. Some high-profile CEOs aren't included because they don't fit the criteria, such as Amazon's Andy Jassy and Twitter's Parag Agrawal. The survey doesn't count changes in the value of CEOs' pension benefits and some other items in its totals for compensation. (Here's a list of the 10 best-paid CEOs.)