August 16, 2018

The Era of CEO Super-Pay Appears to Be on Hiatus

EPI has an interesting piece today about the growth of CEO pay. It’s the usual story: depending on how you measure it, CEO pay used to be about 20x worker pay, while today it’s 200-300x higher. But I was more curious about something else. CEO pay in recent decades has been tied to stock grants as a way of “paying for performance.” So how does CEO pay compare to the stock market?

Since I’m lazy I just averaged EPI’s two measurements to produce a single trendline. Here it is:

In theory, CEO pay ought to follow the stock market under a pay-for-performance scheme. But no. Even compared to the S&P, CEO pay skyrocketed from 2x to 10x between 1965 and 2000.

But then a funny thing happened: nothing. CEO pay flattened out at 10x and actually went down to about 7x after the Great Recession. By most measurements, CEO pay has stagnated relative to the stock market since 2010.

The same is true of workers, so where is all the money going? The answer, apparently, is that stockholders got tired of giving their profits away to both workers and executives. So they’re keeping it for themselves, as we see in reports of corporate earnings, dividend payouts, and stock buybacks. For now, anyway, the era of the superstar—and super compensated—CEO appears to be over.

WE'LL BE BLUNT:

We need to start raising significantly more in donations from our online community of readers, especially from those who read Mother Jones regularly but have never decided to pitch in because you figured others always will. We also need long-time and new donors, everyone, to keep showing up for us.

In "It's Not a Crisis. This Is the New Normal," we explain, as matter-of-factly as we can, what exactly our finances look like, how brutal it is to sustain quality journalism right now, what makes Mother Jones different than most of the news out there, and why support from readers is the only thing that keeps us going. Despite the challenges, we're optimistic we can increase the share of online readers who decide to donate—starting with hitting an ambitious $300,000 goal in just three weeks to make sure we can finish our fiscal year break-even in the coming months.

Please learn more about how Mother Jones works and our 47-year history of doing nonprofit journalism that you don't find elsewhere—and help us do it with a donation if you can. We've already cut expenses and hitting our online goal is critical right now.

payment methods

WE'LL BE BLUNT

We need to start raising significantly more in donations from our online community of readers, especially from those who read Mother Jones regularly but have never decided to pitch in because you figured others always will. We also need long-time and new donors, everyone, to keep showing up for us.

In "It's Not a Crisis. This Is the New Normal," we explain, as matter-of-factly as we can, what exactly our finances look like, how brutal it is to sustain quality journalism right now, what makes Mother Jones different than most of the news out there, and why support from readers is the only thing that keeps us going. Despite the challenges, we're optimistic we can increase the share of online readers who decide to donate—starting with hitting an ambitious $300,000 goal in just three weeks to make sure we can finish our fiscal year break-even in the coming months.

Please learn more about how Mother Jones works and our 47-year history of doing nonprofit journalism that you don't elsewhere—and help us do it with a donation if you can. We've already cut expenses and hitting our online goal is critical right now.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate