CEO Compensation Rose Nearly 6% in 2025, Widening Pay Gap with Median Workers
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The typical CEO compensation package at S&P 500 companies increased to $17.7 million in 2025, while median employee pay rose to $89,744. At half the surveyed companies, it would take a median worker 200 years to earn what their CEO made in one year. Shareholder approval for executive pay packages remained high.
Facts First
- CEO pay rose 5.9% in 2025 to an average of $17.7 million
- Median employee pay increased 4.7% to $89,744
- Pay ratio widened at half of companies, requiring 200 years of median worker pay to match one CEO year
- Shareholder 'say on pay' votes averaged 90% approval
- Compensation for women CEOs fell 2.6% while pay for men rose 6.4%
What Happened
The Associated Press (AP) CEO compensation survey found the typical compensation package for executives at S&P 500 companies rose nearly 6% in 2025 to $17.7 million. The median employee at those companies earned $89,744, a 4.7% year-over-year increase. The survey included 337 executives who served at least two full consecutive fiscal years and filed proxy statements between January 1 and April 30. At half the companies in the survey, the pay ratio required a median worker 200 years to earn what a CEO earned in one year, compared to 192 years in the previous year. The average 'yes' vote for 'say on pay' shareholder votes in the survey was approximately 90%.
Why this Matters to You
The widening gap between executive and employee compensation could influence broader wage trends and corporate governance. As a worker, your own wage growth of 3.4% through 2025, as reported by the Labor Department, may appear slower compared to the near 6% rise in CEO pay. High shareholder approval for these packages suggests investors may be prioritizing leadership incentives tied to long-term performance, which could affect the stability and strategic direction of companies you invest in or work for.
What's Next
Compensation packages for several prominent CEOs are tied to ambitious, long-term performance targets. Tesla CEO Elon Musk's $132.3 billion in stock awards are contingent on meeting 10-year targets. Welltower CEO Shankh Mitra's $821.1 million package and Broadcom CEO Hock Tan's $205.3 million package for 2028-2030 are similarly linked to future company growth. These structures indicate that future CEO pay may become even more volatile, heavily dependent on the company's success in meeting specific, multi-year goals.