It pays to be a chief executive officer in the United States, according to a new report revealing that the pay gap between U.S. CEOs and their employees is larger than in any other country.
Related: How the Rich Get Rich: These Tech CEOs Are Making Bank
The U.S. CEOs of the top publicly traded companies came in first on Bloomberg's 2017 ranking of Global CEO Pay-to-Average Income ratio. According to the analysis, CEOs in the U.S. averaged $14.3 million in annual pay, making 265 times more than their average worker.
The analysis examined benchmark stock indexes across 22 nations. China and Norway ranked at the bottom of the list. Norway had the smallest pay gap with CEOs making $1.28 million compared to the income of its average worker at $64,346, an income "roughly equal to the income generated by 20 people," according to Bloomberg.
One of the reasons CEOs in the U.S. make more could be competition. Tim Quigley, a University of Georgia associate professor, told Bloomberg that corporations pay CEOs in accordance with their peers at other corporations.
Apple CEO Tim Cook received a payout of $102 million for the 2017 fiscal year with a 74 percent increase in his bonus. But Cook still doesn't top the list of highest paid CEOs in the U.S. In 2016, Marc Lore, CEO of e-commerce for Wal-Mart, brought in $243.9 million.
"Regardless of how it's measured, CEO pay continues to be very, very high and has grown far faster in recent decades than typical worker pay," Economic Policy Institute researchers Lawrence Mishel and Jessica Schieder wrote. "Exorbitant CEO pay means that the fruits of economic growth are not going to ordinary workers since the higher CEO pay does not reflect correspondingly higher output."
The Economic Policy Institute released a report in July on trends in compensation that found that CEOs are paid more because of their "power to set pay, not because they are more productive or have a special talent or have more education." The report found that CEOs in the U.S. make more than the mid-1990s and since the 1960s. In 2016, CEOs earned an average of $15.6 million, which is about 271 times more than the pay of their workers, according to the study.
"If CEOs earned less or were taxed more, there would be no adverse impact on output or employment," they wrote.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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Beatrice Dupuy joined Newsweek in 2017. She has formerly worked at the Star Tribune in Minneapolis where she covered several ... Read more
