AFL-CIO: S&P 500 companies CEO-to-Employee pay ratio up, averaged $299:$1 in 2020

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FILE: $100 bills. (NEXSTAR)

The largest collective organization of trade unions in the United States, the AFL-CIO, says that the average pay ratio of CEO-to-Employees for S&P 500 companies increased to 299:1 in 2020 from 264:1 the previous year.

The CEO-to-employee pay ratio measures how much money a company’s chief executive officer makes for every $1 its median employee makes. The Securities and Exchange Commission (SEC) has required larger publicly traded companies to calculate and disclose the metric since 2017.

According to the AFL-CIO Secretary-Treasurer Liz Shuler, the average compensation for an S&P 500 CEO in 2020 was $15.5 million.

An “Executive Paywatch” website created by the AFL-CIO allows users to see the CEO’s salary and CEO-to-employee pay ratios of many of America’s largest corporations, not just those in the S&P 500, without looking through SEC filings.

“On average, in 2020 at S&P 500 companies, CEO pay increased by 5 percent while the disclosed median employee’s pay at those same companies only increased by 1 percent.” said Shuler.

She also pointed to low wage industries like the fast food sector and retail which saw even larger disparities where she says the S&P 500 average reached 741:1. Household names Walmart, McDonalds, and Starbucks all reported pay ratios over 1000:1.

The AFL-CIO endorsed the Protecting the Right to Organize Act, or PRO Act, as a measure to increase union membership in the U.S. which has been in decline for decades. According to the Bureau of Labor Statistics, just 10.8 percent of wage and salaried workers were members of a union in 2020, that is a little more than half the 20.1 percent rate the country had in 1983, the earliest year the bureau says for which comparable union data is available.

The bill passed the U.S. House of Representatives earlier this year with slight bipartisan support, all but one Democratic representative voted for the bill along with five Republican members of the House. Opponents of the PRO Act argue it infringes on employee rights and gives unions too much power.

The S&P 500 is a popular stock market index of 500 large publicly traded companies in the United States.

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