Chief executive officers of the S&P 500 (INDEXSP:.INX) companies earn an eye-popping 354 times more than the average American employee. According to a survey conducted by AFL-CIO, an average CEO earned $12.3 million while an average worker received an annual pay of $34,645 in 2012.
The flamboyant chief executive officer of Oracle Corporation (NASDAQ:ORCL), Larry Ellison was the highest paid CEO with a $96.1 million package. AFL-CIO represents over 50 trade unions, according to CNN Money. Ellison was followed by the Credit Acceptance Corp. (NASDAQ:CACC) chief executive Brett Roberts with $54.3 million. David Zaslav of Discovery Communications was the third highest paid CEO, earning $50 million last year.
One chief executive to experience the most drastic change from 2011 was Tim Cook of Apple Inc. (NASDAQ:AAPL) Cook received $376 million in 2011, but his pay was reduced to just $4.2 million in 2012. His higher compensation in 2011 was because of long-term stock awards. The decline in Cook’s compensation alone reduced the overall average of CEOs payout by 5 percent from 2011 to 2012.
The difference between the CEO’s and the average worker’s compensation has widened over the years. While in 2012, it was 354 times, the difference was 281 times in 2002, while just 42 times in 1982. The gap peaked in 2000 when it rose to 525 times. The Wal-Mart Stores, Inc. (NYSE:WMT) CEO earns 1034 times the average company worker, according to another study by PayScale. Studies have shown that CEO compensation grows three times faster than average workers’.
AFL-CIO president Richard Trumka said that the disparity reminds politicians sitting in Washington that most American workers continue to struggle. People are barely making their ends meet, their salaries are stagnant, and corporations have started taking away their pensions and health care. And most of these average workers don’t know how much their CEO earns.
AFL-CIO wants regulators to enforce a rule that publicly traded firms must disclose their CEO pay in comparison to average workers. The SEC has delayed bringing that rule, primarily because of lobbying by large companies.