Two-thirds of Americans believe companies are failing to address the widening pay gap between CEOs and typical employees, early results of a Gallup and Bentley University poll reveal.
This marks the third consecutive year that most Americans have expressed this concern.
Nell Minow, vice chair of ValueEdge Advisors, described CEO pay as “an outrage” and “atrocious,” emphasizing that it undermines confidence in institutions.
In 2023, the average CEO of an S&P 500 company earned 196 times more than a typical employee, up from 185 times in 2022.
Despite 83 percent of Americans considering it crucial for businesses to reduce this gap, only 13 percent believe companies do a fair job managing CEO compensation.
According to the AP’s annual compensation survey, median compensation packages for S&P 500 CEOs rose nearly 13 percent last year.
However, pay and benefits for private sector employees increased by just over four percent in 2023.
“How can a CEO make 196 times the average worker?”
This resulted in average CEO pay reaching $16.3 million, compared to the median salary for employees salary of $81,467.
Cynthia Clark, a professor of management at Bentley University, said: “Instinctively, it doesn’t seem fair. How can a CEO make 196 times the average worker?”
The poll also showed bipartisan agreement on the issue, with 96 percent of Democrats and 66 percent of Republicans considering reducing the pay gap important.
Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies, said CEO pay is “an issue that cuts across the political spectrum.”
She said dissatisfaction with CEO pay might have driven the resurgence in organized labor activity, especially those seen at major unions like United Auto Workers.
Anderson said: “Coming out of the pandemic, the idea that one person in a corner office is worth hundreds of times more than frontline workers, many of whom were doing essential work to keep our economy going—people just aren’t buying that anymore.”
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In April, a poll by Data for Progress showed bipartisan support for legislation that would increase taxes on companies paying their CEOs at least 50 times the median employee salary.
Similar bills have been introduced in Congress, but corporate lobbyists argue high CEO pay is necessary to attract top talent.
The Gallup-Bentley findings coincide with Tesla shareholders approving a $56 billion pay package for CEO Elon Musk.
This move has sparked debate over the influence of shareholders on executive compensation.
Anderson pointed out that major opposition from institutional investors against Musk’s pay package shows potential for reining in excessive CEO pay, though achieving majority votes against such packages remains challenging.
