CEO pay dipped in 2023 but remains enormous compared with the pay of other workers, a new Economic Policy Institute report finds. Average realized CEO compensation—including stock awards and options—at the top 350 U.S. firms was $22.2 million in 2023, a 19.4% decrease from 2022.  

Cumulatively, however, CEO compensation has skyrocketed 1,085% since 1978 compared with just a 24% increase in a typical worker’s compensation. In 2023, CEOs were paid 290 times as much as a typical worker— in stark contrast to the 21-to-1 ratio in 1965.  

The report also finds that CEO compensation was nearly 10 times as high as wages of the top 0.1% of wage earners in 2022 (the latest year for which data on the top 0.1% are available). This indicates that growing pay does not appear to reflect the greater productivity of executives, but rather the bargaining position to extract excess pay from corporate boards that are largely captured by these CEOs. If CEOs were paid less, there would be no loss of productivity or output in the economy. 

“CEOs are paid so much more because of their extraordinary leverage over corporate boards, not because of an extraordinary skill or contribution they make to their firms. Exorbitant CEO pay has contributed to rising inequality in recent decades—concentrating earnings at the top and leaving fewer gains for ordinary workers. The silver lining in this otherwise unfortunate trend is that CEO pay can be curtailed without damaging economywide growth,” said Josh Bivens, EPI chief economist and co-author of the report.  

The report outlines several policy solutions that could limit CEOs’ ability to attain increasingly higher pay. These policies could include reinstating higher income tax rates at the very top, making shareholder votes on CEO compensation more binding, using antitrust enforcement and regulation to rein in the market power of the largest firms, and using tax policy to incentivize shareholders or corporate boards to push for lower CEO pay. 

“Policies that limit CEOs’ ability to collude with corporate boards to extract excessive compensation are needed to prevent the U.S. from becoming a winner-take-all society. There would be no adverse impact on the overall economy if CEOs earned less or were taxed more,” said Elise Gould, EPI senior economist and co-author of the report.