A new survey of 200 public companies with the highest CEO pay by The New York Times found that chief executive pay skyrocketed to unprecedented levels during the pandemic and the CEO-to-worker pay gap widened at top corporations.
At the 183 companies that answered a survey conducted by Equilar for The New York Times, 68 percent reported a CEO salary that represented a CEO-worker pay gap that’s wider than it was before the pandemic.
A company called Palantir, a software analytics company which The New York Times’s Peter Eavis points out makes over half of its revenue from government contracts, paid its chief executive Alexander Karp $1.1 billion in 2020 — topping the list. The CEO of DoorDash, Tony Xu, was second on the list, receiving $414 million in compensation in 2020.
Meanwhile, in 2020 alone, six CEOs made it onto Equilar’s top 10 CEO compensations for the past decade.
As the richest of the rich have only grown their wealth drastically during the pandemic, Democrats and progressives have decried the trend for coming at the cost of workers and amid an economy that is not working for most people.
“While Americans were cheering on the workers who were keeping our economy going, corporate boards were busy coming up with ways to justify pumping up C.E.O. pay,” Institute for Policy Studies (IPS) global economy director Sarah Anderson told The New York Times.
Indeed, another Times report from Saturday found that, the day before a Donald Trump-fueled mob attacked the Capitol on January 6, the Trump administration quietly handed out yet more tax loopholes to rich executives that could help them avoid paying hundreds of millions of dollars in taxes. It was yet another set of loopholes among many others that have been established over the years, thanks in large part to private equity firms and their firm grasp over politicians.
And, while the CEOs were reaping ever-larger pay packages from the pandemic, the workers who buttress their companies weren’t paid nearly as much. The ratio between CEO compensation and median worker pay at the 183 companies grew from 245 to 1 in 2019 to 274 to 1 in 2020.
Meanwhile, while CEOs at the surveyed companies received 14.1 percent more in 2020 than in 2019, the median worker at these companies received a paltry 1.9 percent raise. That perceived pay raise, however, may actually be a result of the many worker layoffs conducted by some of the biggest companies amid the pandemic.
The findings line up with other recent research that has found skyrocketing CEO-to-worker pay ratios during the pandemic. An IPS report in May found that at 51 of the companies with the lowest median worker wages within the S&P 500, CEO compensation also skyrocketed while median worker compensation actually fell by 2 percent from 2019 to 2020.
At the companies studied by IPS, the CEO-to-worker pay ratio was a whopping 830 to 1 in 2020.
“Giant corporations have plenty of money for huge payouts to their CEOs and wealthy shareholders,” said Sen. Elizabeth Warren (D-Massachusetts) on Twitter, sharing The New York Times’s report. “They just don’t want to pay their workers or taxes. Congress needs to wake up, listen to struggling families, and make these companies pay their fair share.”
Indeed, progressives have been working on legislation aimed at making the rich pay their fair share. Lawmakers like Warren and Sen. Bernie Sanders (I-Vermont) have introduced proposals for a higher corporate tax rate, wealth tax and higher estate tax to, as Sanders puts it, fix the “corrupt and rigged tax code.”
Democrats are also trying to fix the Internal Revenue Service (IRS) to ensure more crackdowns on wealthy tax cheats. President Joe Biden is exploring doubling the workforce at the agency, while Warren has called for a much larger expansion of the IRS. Warren has proposed providing the IRS with $31.5 billion over the next 10 years, more than doubling its budget — an investment that would pay for itself through audits of the wealthy.