CEO Pay: How Much Do CEOs Make Compared to Their Employees?

CEO pay in the U.S. has grown exponentially since the 1970s, according to the Economic Policy Institute (EPI), rising almost 1,000 percent compared to a rise in worker salaries of roughly 11 percent over the same time period (adjusted for inflation.) Starting next year, the Dodd-Frank Act, enforced by the Securities and Exchange Commission (SEC), will require publicly traded companies to publish their CEO-to-worker pay ratio, a move that could bring this issue further into the public consciousness. To get a sense of what might be revealed once companies begin reporting this new information, PayScale partnered with Equilar, a leader in executive compensation and corporate governance data solutions, to calculate ratios for some of the highest-paid CEOs in the U.S. Only companies with annual revenue over $1 billion were considered. PayScale also surveyed employees to find out how they feel about their CEO's compensation, and talked to a few CEOs (including our own) to understand how they communicate to employees about executive pay today.

The average CEO-to-worker pay ratio for the 168 companies included in this report stands at about about 70-to-1, with some CEOs making more than 300 times the median salary of their employees – just in cash (base pay, bonuses, profit sharing, etc.). Many CEOs receive substantial stock/option grants and perks as part of their compensation, which can more than quadruple their total annual pay. But similar data for employees by company is not readily available, so we looked solely at cash compensation for both CEOs and workers to calculate ratios for this report.

Larry Merlo, the CEO of CVS Health Corp, made roughly 434 times the salary of the median CVS employee in 2015, the largest ratio between CEO and employee pay at any company on this list.

It wasn't always this way. In 1965, the CEO-to-worker compensation ratio in the United States stood at about 20-to-1, according to a 2015 report by the EPI. But starting in the 1970s up through 2014, "inflation-adjusted CEO compensation increased 997 percent, a rise almost double stock market growth and substantially greater than the painfully slow 10.9 percent growth in a typical worker's annual compensation over the same period."

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