A list of the best paid CEOs leaves us a figure of how the salary of managers has risen since 1978: 1,085%

The Wall Street Journal publishedThe list of the best paid CEOs of 2024. The list itself already presented some curiosities. For example, the fact that, surprisingly, CEO of great technology that accumulate stock capitations Superior to the GDP of some countries, they are not found in the top positions of this list.

However, its publication has put the table on the table Huge salary difference which exists between the figure of the company’s executive director and the average salary of its employees. A study of Economic Policy Institute He has investigated The evolution of this difference and has discovered that, since 1978, CEO wages have increased 1,085%. He Salary of its employeeson the other hand, it has only done so by a fraction of that percentage.

The CEO who won the most in 2024. According to the list published by The Wall Street Journal Based on public remuneration data of the companies of the S&P 500, the best paid executive in 2024 was Rick Smith, CEO of Axon Enterprise that bases their business on the manufacture of electricity weapons of defense or taser. Smith received no less than 164.53 million dollars in 2023.

Just behind, we find some old acquaintances of this type of listings. Lawrence Cup, as CEO of General Electric pocketed 88.95 million, or Stephen Schwarzman, CEO of Blackstone that received a bonus of 84 million dollars.

To find What some of the technological CEOs chargedwe must go down to the fourth place that Tim Cook occupies after receiving a salary bonus of 74.61 million dollars.

Rico worker, poor worker. Beyond the salary that each company wants assign its managers For the achievements, there is the background of the salary gap between the managers of those companies and their employees. In this case we are not talking about a senior manager should charge the same as its employees, but, proportionally, the remuneration of managers have increased to a greater extent among members of the board of directors than among their workers.

In your report, The researchersof the Economic Policy Institute They point out that between 1978 and 2023, the executive directors of the main companies of the S&P500 have increased their remuneration by 1089%, while the average salary of their employees has done so in 24%.

Exponential growth from 90s. The data reflects that the increase in these remuneration to managers has not been linear and progressive, but shot between 90 and 2000, remaining at those levels since then. Putting the focus between the salary of the CEO and the salary average of its employees, between 1964 and 1978 an executive director charged between 15.4 and 23 times the salary of its employees.

On the other hand, between 1978 and 1990 that figure amounted up to 44.9 times and, from 1995, that figure is triggered until reaching levels of 398 times the salary of its employees reached in 2000. Since then, the successive economic and financial crises have made me make that That figure oscillates between 330.2 times and 190.6 times higher than the average salary of its employees.

The elite inside the elite. This increase has not only occurred among the general labor mass of the workforce, but the CEOs have become a kind of elite among the elite. The study analyzes the evolution of CEO remuneration With respect to salaries of 0.1% that charges the most in companies, and here they have also marked differences following the same pattern as with the rest of the workforce.

Between 1964 and 1990, the CEO charged between 2.6 and 3.1 times more than 0.1% of better paid employees of its workforce. However, from the 90s that difference is triggered until reaching 9.2 times in the 2000s, and reaching 9.4 times the salary of the best paid employees registered in 2021.

What counts is your influence. The authors of the study suggest that the astronomical salary increase of the CEO is not due to their worth making business decisions, but responds to a consideration for the weight of the manager on the Board of Directors. How much greater is its influence And power at that board is its salary. “There should be meetings of the Board of Directors where people ask: ‘Can we afford to pay less to our executive director?’ assuredto The Washington PostDean Baker, co -founder of the Institute in charge of the report.

An example: Elon Musk in Tesla and his enormous capacity to influence a board of directors formed by personal friends, former collaborators and even his brother Kimbal. Thanks to this ability to influence the Board of Directors, the CEO can negotiate more generous remuneration than when they submit to the scrutiny of people without direct linking.

According to the authors of the study, this capacity for influence may have made the CEO establish salary increases for faster managers, “concentrating income in the highest and leaving less profits for common workers.”

A salary detached from the results. At this point, it is easy to think that this increase is due to the fact that the CEO of those companies They have been geniuses that have taken companies to their best historical dimensions and that is why they are rewarded. However, the data They tell us something else And the researchers confirm “the salary increase of executive directors does not reflect an increase in the value of skills or in the contributions to the productivity of companies,” says the EPI report.

In 2024, for example, the best paid manager was Hock Tan, CEO of Broadcom, with 161.74 million dollars. The Board of Directors justified its salary bonus because the company had managed to double its stock market value. However, Badrinarayanan Kothandaraman, executive director of Enfase Energy, received compensation of $ 19.52 million while his company left 50.1% of its value.

Bag balls. To try to correct that dynamic, from the end of the 90s and 2000, many companies assigned company shares As part of the salary of its managers. The study data reveal that, in 2006, 78% of the remuneration of the CEO came from participation in the company. In 2023 it was 76.6%. That means that, if the CEO meets the agreed objectives, You will receive your bonus Otherwise, you will only receive a base salary.

A report of the consultant Equilate He points out that this type of retribution based on actions would also explain that exponential increase “contributing largely to the general increase in total compensation.” That is, upon receiving your Sales Salary This increase to “Bursatile balls that generated the Puntocom and the high record contributions that technological ones have registered with AI.

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