The relationship between what CEOs earn and their employees has never been more disparate

Our salaries are no longer enough. With inflation through the roof, the euro at the level of the dollar and the prices of almost everything rising non-stop, things have become difficult, but not for everyone: normal employees may be having a worse time, but that is not the reality for managers and CEOs of large companies.

‘greedflation’. The ‘inflation of greed’, as they call it at Fast Company, has made the relationship between the salaries of CEOs and their employees more disparate than ever. The study The AFL-CIO has been recording these differences in the United States for the last 20 years, and the data is scandalous.

Your CEO earns (a lot) more than you. The study focuses on the largest companies in the world, those that make up the S&P 500 index. The CEOs of those companies earned an average of 18.3 million dollars (each) in 2021. That supposes a relation that, on average, is 324 to 1: for every dollar that an employee earns, the CEO earns 324. The figure is in fact more disparate than ever, and goes beyond what the relationship had been in 2019 (264 to 1) and in 2020 (299 to 1).

Inflation strikes again. Public companies must disclose the salary difference between their directors and the average employee. Median compensation for S&P 500 CEOs grew $2.8 million (18.2%) from 2020. Inflation in 2021 was 7.1%, and workers’ wages grew by just 4. 7%. You don’t have to do a lot of math to understand what’s going on.

profit sharing. According to the AFL-CIO, when profits at the companies studied go up, CEO compensation does too, but employee wages actually go down after adjusting for inflation. “It is the CEOs, not the workers, who are causing the inflation. These exorbitant CEO salaries are a symptom of the inflation of greed.”

In fact, they add, “instead of investing in their staff by raising salaries and maintaining the prices of their products and services, their solution is to raise record profits by raising prices and causing a recession that will put people on the street.”

Source: AFL-CIO

Expedia, Intel and Apple go further (better not to talk about Amazon). That ratio of 324 to 1 is the average, but there are companies that go much further. At Expedia, where the median salary is $102,270 a year, the ratio is 2,987 to 1. At Intel it is 1,711 to 1 and at Apple it is 1,447 to 1.

At Amazon, where the median employee salary is $32,855 according to that study, the ratio is 6,474 to 1 (Andy Jassy, ​​its CEO, received $212.7 million in total compensation in 2021).

an upward trend. In the study, the AFL-CIO highlights that this is not new. In S&P 500 companies, the median salary of managers has grown by an average of $500,000 per year over the last 10 years, while the salary of employees has grown by an average of $1,303 per year, with the cap being $58,260 in 2021 In Spain, by the way, we are very stagnant in that section.

We have already seen how the salaries of the CEOs of large technology companies are spectacular: the 1.6 million that Linus Torvalds earns are very short compared to what Elon Musk earns, for example, but Jeff Bezos earns the average salary in Spain in 20 minutes.

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