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Pay gap between top CEOs and workers grew during pandemic

CBS News logo CBS News 7/14/2021 Kate Gibson
a man wearing a suit and tie: ceo-pay.jpg © Credit: CBSNews ceo-pay.jpg

The pay gap between CEOs and the typical U.S. worker widened during the pandemic. Leaders of companies listed on the S&P 500-stock index earned an average of $15.5 million in 2020, a raise of more than $700,000 from the previous year, according to the AFL-CIO. 

That means S&P 500 chief executives made 299 times what rank-and-file employees earned, up from a ratio of 264-to-1 in 2019, the labor union said in a report released on Wednesday. 

The biggest divide was among consumer discretionary companies, such as apparel, fast-food and other large retailers. The average consumer discretionary company in the S&P 500 Index had a pay ratio of 741-to-1 in 2020, according to AFL-CEO data. New Amazon CEO Andy Jassy received $35.8 million in total compensation in 2020, for example — 1,234 times that of the median worker at the online retailer, who made $29,007 last year, the union said in a statement.

Amazon did not immediately respond to a request for comment.

The pay gap was smallest among utilities, where the ratio was 97-to-1, a scenario that AFL-CIO Secretary-Treasurer Liz Shuler attributed to the sector's heavy concentration of organized workers. "It's no coincidence that, according to the Bureau of Labor statistics, 20% of utility workers are members of unions," Shuler stated. 

a woman standing in front of a window: Morgan Stanley CEO wants workers in offices 01:05 © Provided by CBS News Morgan Stanley CEO wants workers in offices 01:05

While Shuler and the AFL-CIO decried the heavy compensation given to many CEOs amid a pandemic that had many average workers losing their jobs, at least one company had a different take.

Yum Brands' profits slid during the pandemic, but the fast-food giant still gave its CEO a multimillion-dollar bonus, with its board of directors finding it "unfair" to penalize him due to COVID-19's adverse impact on the company's bottom line. 

The AFL-CIO findings echo those of a study by the Institute for Policy Studies, which found half of the 100 largest U.S. employers of low-wage workers adjusted their CEO pay packages last year, sweetening rewards for chief executives during the pandemic while cutting pay for average workers.

The median pay package for a CEO at an S&P 500 company hit $12.7 million in 2020, according to data analyzed by Equilar for the Associated Press. 

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