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Compensation for CEOs Increased by 725 Percent from 1978 to 2011
If you are a chief executive then you have one of the most lucrative jobs today. CEOs in the United States witnessed their pay increase by 15 percent in 2011 after it increased by 28 percent in 2010, according to a report released by GMI Ratings. At the same time, employees saw their inflation-adjusted wages decrease by 2 percent in 2011, according to the Labor Department.
These numbers seem to fall in line with a trend that dates back three decades in the United States. From the years 1978 to 2011, pay for CEOs increased by 725 percent. During that same time span the pay for employees increased by just 5.7 percent, according to a study released by the Economic Policy Institute. This means that the pay for CEOs increased 127 times quicker than that of employee pay.
In 2011, CEOs earned 209.4 times more than employees did, which has sparked a debate about income inequality between the employees and the CEOs. In 1978, CEOs earned only 26.5 times more than employees. This means that today, CEOs are bringing home a much larger chunk of company gains then they did in the past.
These numbers occur in spite of the fact that employees have been able to double their productivity. From 1978 to 2011, employee productivity increased by 93 percent on an hourly basis and 85 percent on a per-person basis, according to the Federal Reserve Bank of St. Louis.Compensation for CEOs Increased by 725 Percent from 1978 to 2011 by Jim Vassallo