It’s no secret CEOs take home hefty paychecks. Over the past decade, the CEO-to-worker pay gap has only expanded.
In a world of high inflation and rising prices on everything from housing to food, this widening divide is a thorn in the side of workers. In 2021, for example, CEOs took home 399 times more income than a typical worker — $27.8 million on average, including stock rewards — according to data from the Economic Policy Institute . An even more extreme number comes from comparisons over a longer horizon: Between 1978 and 2021, realized CEO pay increased by a whopping 1,460%, while pay for private sector production and nonsupervisory workers rose only 18%.
Workers are well-aware the gap exists — and that it negatively impacts their motivation, team morale, and even company wellbeing. When workers feel undervalued, motivation and productivity suffers.
This uneven pay structure can be damaging at the other end too. CEOs holding stock-related incentives are inclined toward short-term risk-taking. For companies, this is a reminder that employee satisfaction, a sense of ownership and achievement, as well as reward in whatever form, are important in running a successful organization.
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