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Pay for S&P 500 chief executives rose by 7.7 per cent last year as packages at the US’s biggest companies keep increasing.
Median total pay for S&P bosses rose to $19mn last year. The jump in median chief executive pay was higher than a 7.2 per cent rise in 2023, according to Farient Advisors, a pay consultancy, and marked the quickest pace of growth since an 11.5 per cent gain in 2021.
Total pay for the broader American workforce increased 3.6 per cent in the 12 months that ended December 2024, according to the Bureau of Labor Statistics.
“We’re still seeing executive pay increases above the inflationary rate as well as above typical rank-and-file employees,” said Eric Hoffmann, chief data officer at Farient Advisors.
The highest paid S&P 500 CEO last year was Rick Smith of Taser maker Axon Enterprise, who raked in $164.5mn mostly from stock awards after meeting targets over several years, according to data provided by MyLogIQ.
Brian Niccol, chief executive of Starbucks, was second with $95.8mn in total last year, mostly from stock awards. His pay package included a $5mn sign-on bonus and two one-off stock awards that ranged from $75mn to $80mn to cover forfeited cash and unvested equity he accrued while running Chipotle.
Axon did not respond to a request for comment and Starbucks declined to comment.
In the UK, median pay for chief executives of the 100 most valuable London-listed companies rose 6.8 per cent to £4.58mn in 2024-25 year on year, according to the High Pay Centre’s annual survey released on Sunday. This is the highest level on record, and the fourth successive year that bosses’ pay has increased.
The level of pay for S&P 500 executives has drawn scrutiny from groups that question whether it is exacerbating inequality.
The American Federation of Labor and Congress of Industrial Organizations, a national trade union, flagged Niccol’s pay package as an example of the widest pay gap between the top executive and median employee of one of the biggest US companies.
Niccol’s annual pay was more than 6,666 times greater than the total pay for the median employee, a part-time barista, who earns about $15,000 a year, according to company filings.
“We just see ever-growing income inequality in this country, and it’s becoming harder and harder for workers to make ends meet,” said Carin Zelenko, director of capital strategies at AFL-CIO.
Sarah Anderson, global economy project director for the non-profit research group Institute for Policy Studies, said the widening gap between chief executive and worker pay was bad for democracy.
“This gap between CEO and worker pay is a key driver of rising inequality and concentration of wealth at the top. We’re seeing more and more signs of how ultra-wealthy people have too much influence over our political system,” she said.
Still, the larger pay ratio between an employee and a chief executive may also reflect a company’s business model. A retail boss is likely to have a wider pay ratio than a technology chief executive who usually hires engineers who are full-time workers.
Nvidia, the most valuable US company, reported a chief executive to median employee pay ratio of 166 to 1, with its median employee earning $301,233 compared with CEO Jensen Huang’s total pay of $49.9mn in 2024.
Meanwhile, shareholder support for executive pay packages has remained strong. ISS-Corporate found that the median shareholder support for executive pay packages has remained between 92.4 per cent and 92.6 per cent for the past five years.
Jun Frank, head of compensation and governance services at ISS-Corporate, said US economic uncertainty may affect executive pay trends in the future.
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