The pay gap between America’s top executives and the average worker widened again in 2024, with annual compensation for S and P 500 chief executives rising seven percent to an average of 18.9 million dollars, according to the American Federation of Labor and Congress of Industrial Organizations.
By contrast, the median United States worker earned 49,500 dollars, reflecting a modest three percent increase over the same period. As a result, chief executives earned 285 times more than the median employee, up from an already stark 268 to one ratio the year before. Put another way, the typical worker would have needed to begin earning wages in the year 1740 to match what the average chief executive received in 2024 alone.
The highest pay ratios were recorded in the arts, entertainment, and recreation sector, where chief executives earned an average of 1,924 times more than their workers.
According to Nirmal Chhabria, Professor of the Practice and Director of the EMBA Dubai Program at Georgetown University’s McDonough School of Business, executive compensation in the United States is heavily weighted toward equity. Roughly 70 to 80 percent of chief executive pay comes from stock options and performance based shares. This structure, he explains, creates exponential wealth potential that is far less common in regions where compensation is dominated by fixed salaries.
Why high chief executive pay matters
Chhabria notes that elevated executive compensation reflects intense pressure to deliver shareholder value in markets driven by short term performance. Boards often justify large pay packages as the cost of securing leaders capable of navigating complex global organizations and generating outsized returns.
From this perspective, compensation is framed as a performance fee. If a chief executive creates ten billion dollars in shareholder value, a fifty million dollar package is viewed as a small percentage of that gain.
The widening pay divide
Executive pay has surged dramatically over the past several decades. Since 1978, chief executive compensation has risen by more than one thousand percent, while typical worker pay has increased by only twenty six percent, according to data from the Economic Policy Institute.
In 2024, chief executives earned roughly 281 times more than the average employee. The Institute defines a typical worker as a full time employee in production or nonsupervisory roles across industries where the largest corporations operate. The growing divide highlights a long term shift in how corporate success is rewarded, with stock based incentives and bonuses driving executive wealth far faster than wages for most workers.
The AFL CIO also found that large pay gaps reinforce gender and racial inequality, since women and people of color are overrepresented in lower wage roles and underrepresented in corporate leadership positions.
Top ten highest paid chief executives in the United States in 2024
- Brad Jacobs
Annual pay 189.4 million dollars
Company QXO Inc. - Rick Smith
Annual pay 164.5 million dollars
Company Axon Enterprise - Brian Niccol
Annual pay 95.8 million dollars
Company Starbucks Corporation - H. Lawrence Culp Jr
Annual pay 89 million dollars
Company GE Aerospace - Ryan Saadi
Annual pay 87.8 million dollars
Company Tevogen Bio - Michael Arougheti
Annual pay 85.4 million dollars
Company Ares Management Corporation - Robert Antokol
Annual pay 84.1 million dollars
Company Playtika - Stephen Schwarzman
Annual pay 84 million dollars
Company Blackstone - Jason Les
Annual pay 83.5 million dollars
Company Riot Platforms Inc. - Satya Nadella
Annual pay 79.1 million dollars
Company Microsoft
