The compensation packages for CEOs at major companies saw a significant rise in 2025, with the typical package increasing by nearly 6% to $17.7 million. This increase comes as company boards reward top executives for boosting profits and stock prices, while also providing incentives for their continued leadership.
Economic Disparities
Despite the increase in CEO pay, the median employee at S&P 500 companies earned $89,744, reflecting a 4.7% year-over-year increase. While this outpaced inflation, many workers continue to face financial challenges due to accumulated higher prices over recent years.
The Associated Press’ survey, conducted with data from Equilar, analyzed pay for 337 executives at S&P 500 companies. It revealed that at half of these companies, it would take a median worker 200 years to earn what the CEO makes in one year, up from 192 years in the previous survey.
CEO Pay and Performance
Many companies have responded to shareholder calls to tie CEO compensation more closely to performance, resulting in pay packages heavily weighted with stock awards. These awards are contingent on meeting specific targets, such as higher stock prices or improved profits, often leading to one-time rewards to retain CEOs.
Shareholders have a say in CEO pay packages through non-binding votes at annual meetings, with most plans receiving overwhelming support. The average approval rate in this year’s survey was around 90%.
Notable Compensation Packages
Elon Musk’s compensation at Tesla was valued at $132.3 billion, entirely in stock awards, contingent on ambitious targets over the next decade. Shankh Mitra of Welltower received the second-largest package at $821.1 million, primarily in stock awards, reflecting the company’s tripled stock price since he became CEO.
Other notable packages include Hock Tan of Broadcom, whose compensation is tied to AI revenue growth, and David Zaslav of Warner Bros., who received $165 million for negotiating a lucrative sale to Paramount Skydance.
Despite criticism from worker advocates and some members of Congress, CEO pay continues to rise, highlighting a significant economic divide between executives and average workers.
Original reporting: Dallas TX News (HLL/CB) — read the source article.
