It’s no secret that company CEOs earn more money than the typical worker. Of course, the complexity and scope of their role often justify the hefty paychecks they receive. However, it can ignite a sense of resentment within the organization if employees aren’t compensated fairly while their superiors continue to enjoy the fruits of their labor.
Recently, redditor Puzzlehead12342 revealed that the CEO in their workplace makes $186 million, which is more than all of the employees make within a year. All thanks to his team members, whose workload has largely increased without any additional pay. Feeling deceived, the worker turned to the anti-work community, wondering if it’s fair that their CEO receives such enormous sums while they are largely underpaid.
Often, the hefty paychecks CEOs receive are justified. However, taking advantage of their employees isn’t
Image credits: Hunters Race / pexels (not the actual photo)
This worker felt deceived after her superior cashed out $186 million, while his team was overworked and underpaid
Image credits: Mizuno K / pexels (not the actual photo)
Image source: Puzzlehead12342
CEOs were paid 399 times as much as a typical worker in 2021
According to the Economic Policy Institute (EPI), CEOs were paid 399 times as much as a typical worker in 2021. One key factor that allowed their salaries to skyrocket was the shift toward shareholder capitalism in the late 20th century.
The main purpose of shareholder capitalism is to make as much money as possible for the people who own shares in the company. And when executives manage to do that and the company performs very well, they are compensated very handsomely, which is one of the main reasons they earn so much.
Only about 20% of a CEO’s pay is base salary, which is also steadily increasing due to the scarce pool of talented and qualified individuals with the necessary skills and experience to lead large organizations. When such supply is limited, recruiters are willing to pay more to secure the most sought-after leaders, which, over time, ratchets up their earnings even more.
However, David Bolchover, a management-pay expert, points out that the company is not necessarily performing well because of its CEO. There are several factors that have nothing to do with them that might be pushing the company forward, like sector booms, limited competition, or the contribution of workers.
He adds, “The impact of a CEO on company performance is not measurable, which is the nub of the issue. They have this ‘talent ideology’ to justify this. But is their ability so rare? I think it’s a con.”
Employees’ pay is increasing at a snail’s pace compared to their executives
Meanwhile, employees’ pay is increasing at a snail’s pace compared to their executives. Lawrence Mishel, a distinguished fellow at EPI, suggests that the reason might be high unemployment, which forces people to accept jobs with low wages, as well as globalization, which allows companies to source cheaper workers. He also mentions the disappearance of unions, which makes it harder for employees to collectively bargain for better compensation.
However, Mishel notes, “We’re now in a moment where workers are feeling agency and demanding more — better jobs.” He believes that the current administration and Congress are seemingly moving in the right direction and have started prioritizing the needs of workers so they can get ahead.
One thing that might help balance the CEO-worker gap is if workers assert themselves and reap their accomplishments, which is going to make it harder for the executive to present them as their own and receive compensation for them.
Mishel believes that if the legislative bodies, with the help of the workers, continue to move in the right direction, chances are we will see wage growth for the vast majority. “And we will see inequality decline over the next five years,” he reassures.
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