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Study: U.S. CEOs earn 312 times more than average workers do

By Ed Adamczyk
President Donald Trump meets with a number of U.S. CEOs during a strategic and policy discussionin the State Department Library in the Eisenhower Executive Office Building on April 11, 2017. File Photo by Olivier Douliery/UPI
President Donald Trump meets with a number of U.S. CEOs during a strategic and policy discussionin the State Department Library in the Eisenhower Executive Office Building on April 11, 2017. File Photo by Olivier Douliery/UPI | License Photo

Aug. 17 (UPI) -- Chief executive officers at the United States' 350 largest companies earned substantially more last year than did average employees, an economic analysis showed Friday.

CEOs have always made more than typical workers, but the study showed the gap is increasing.

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The non-governmental Economic Policy Institute said the average CEO salary was $18.9 million in 2017, an 18 percent increase over 2016. In that span, employees' wages rose just 0.3 percent.

The payout for executives included salary, bonuses, restricted stock grants, long-term incentive payouts and stock options.

The report said the increase in realized stock options -- not salary -- was primarily responsible for the dramatic increase.

With a CEO-to-worker ratio of 312-to-1, last year's gap was one of the largest on record, but not the largest. The record, 344-to-1, was seen in 2000. It was 20-to-1 in 1965, 58-to-1 in 1989 and 270-to-1 in 2016.

"CEO compensation rose by 979 percent (based on stock options granted) or 1,070 percent (based on stock options realized) between 1978 and 2017," the report said. "Both measures of compensation are substantially greater than the painfully slow 11.2 percent growth in the typical worker's compensation over the same period."

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The report made recommendations to close the gap -- like reinstating higher marginal income tax rates at the top, setting corporate tax increases for companies with noticeably out-of-proportion ratios, a cap on compensation and more shareholders oversight on executives' compensation.

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