Income inequality and the decline of the middle class are now common talking points for politicians on both sides of the aisle and a new study released by the Economic Policy Institute might point to at least one reason.
The study looked at the top 350 publicly owned U.S. companies and found that, on average, CEOs made 303.4 times more than their average worker in 2014. The average CEOs salary is $16.3 million per year.
Though the numbers seem dramatic, the biggest gap was recorded in 2000, when CEOs made 376 times more money than their average employee.
The Economic Policy Institute credited stagnant wage growth for employees and a sharp increase in compensation for CEOs for the pay disparity.
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“Over the last three decades, compensation for CEOs grew far faster than that of other highly paid workers, i.e., those earning more than 99.9 percent of wage earners,” the Economic Policy Institute explained, adding that CEOs now receive more than just a salary — they frequently acquire stock options and bonuses as a part of their pay.
“CEO pay is not a symbolic issue — it has real consequences for the vast majority of wage earners. The rising pay of executives reflects wages that could have otherwise gone to workers and has fueled inequality in the United States,” Alyssa Davis, the study’s co-author, said in a statement, reported The Huffington Post.
The Obama administration and congressional Democrats have argued that the pay is excessive. In April, the SEC proposed rules that would require corporate board members to share CEO pay information with shareholders.
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