Many CEOS, at the start of the pandemic, vowed to not take a salary last year to keep layoffs to a minimum. But new preliminary data from the Economic Policy Institute shows that the average CEO’s compensation still jumped 16% last year.
Average worker compensation was up just 1.8%.
“The offer by CEOs to forgo salary increases during the pandemic was largely symbolic,” the EPI said in a blog post. “Salaries were stable, but many CEOs pocketed a windfall by cashing in stock options and obtaining vested stock awards, compounding income inequalities laid bare during the past year.”
The gain was slightly bigger than what CEOs saw pre-pandemic. Between 2018 and 2019, the average compensation was up 14%.
The stock market’s unexpected strength through the health crisis is the primary cause for the increase. Stock-related components comprise roughly three-quarters of CEO compensation, says the EPI. And some were further protected by their company’s board.
“There are also examples of firms making ‘discretionary adjustments’ to their compensation schemes to shield CEOs from ‘the pandemic’s adverse impact on the company’s financial results’,” EPI wrote. “Such adjustments, of course, were not made for rank-and-file workers.”
The growth of CEO compensation was very uneven across firms, notes the Institute—and that was especially true among female CEOs. A separate study found that while most women running big U.S. companies saw pay increases last year, the median pay for female CEOs actually fell 1.9%.
And a report from The Institute for Policy Studies shows that 51 of the 100 S&P firms with the lowest median pay “bent their own rules to pump up executive paychecks” and “provided a 29% boost to executive pay, far more than the other firms.”
The EPI’s full report on CEO compensation is due in June.