Americans are increasingly frustrated with the widening pay gap between CEOs and average workers, as a large majority believe it's important to address this issue, but feel companies are failing to do so effectively. (Shutterstock)
- 83% of Americans believe it's important to avoid significant pay gaps between CEOs and average employees.
- Only 13% of Americans think companies are doing a good job managing pay disparities.
- In 2022, CEOs earned 185 times the median employee's salary, with CEO compensation rising by 12.6%.
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Americans are increasingly frustrated with the massive pay packages of CEOs, reports CNN.
According to a Bentley University-Gallup poll shared exclusively with CNN, 83% of Americans believe it’s important for businesses to avoid significant pay gaps between CEOs and average employees, with 56% considering it “extremely important.” Despite this sentiment, corporations are largely seen as failing in this regard.
Only 13% of Americans feel companies are doing a good or excellent job at managing pay disparities, while 66% rate their efforts as “poor.” This view is consistent across age groups and genders.
Disapproval of CEO Pay Across the Political Spectrum
The issue resonates across the political spectrum: 96% of Democrats, 83% of independents, and 67% of Republicans agree on the importance of addressing major pay gaps. This widespread concern highlights the impact of CEO compensation on public trust, particularly as many Americans struggle with rising living costs.
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“CEO pay is an outrage. It’s atrocious. And it hugely undermines confidence in our institutions,” said Nell Minow, vice chair of ValueEdge Advisors.
Currently, Tesla shareholders are voting on a proposed $40 billion pay package for CEO Elon Musk. If approved, this would starkly contrast the typical employee’s earnings. According to an Equilar and Associated Press analysis, it would take an average worker 196 years to earn what their CEO makes in a year.
“Instinctively, it doesn’t seem fair. How can a CEO make 196 times the average worker?” asked Cynthia Clark, a management professor at Bentley University. “Either the CEO is overpaid, the average worker is underpaid – or both.”
Pay Gap Widens
The gap continues to widen. In 2022, CEOs earned 185 times the median employee’s salary, with CEO compensation, including stock awards, rising by 12.6%.
Former Medtronic CEO Bill George expressed his concern: “It’s gotten completely out of hand. What worries me is there is no ceiling on the amounts people are getting. That’s very troubling to me.”
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Even though public companies must disclose the ratio of CEO to median employee pay since 2017, this transparency hasn’t curbed pay increases. Instead, it may have fueled them by providing CEOs with data on their peers’ earnings.
“There is no possible way to justify CEO pay,” Minow concluded. “It makes people feel that there is a massive injustice in the world and gives them a cynicism that is not healthy.”
Read more at CNN.
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