American CEOs got a 14 percent pay raise last year, study finds

America’s leading CEOs got paid 14 percent more on average in 2019 — and their paychecks could grow again this year even amid the coronavirus pandemic, researchers say.

The chief executives at the top 350 US companies by sales raked in an average of $21.3 million last year, up from about $18.7 million in 2018, according to a Tuesday report from the Economic Policy Institute.

That means the average CEO made 320 times as much money as a typical rank-and-file worker in their industry — a ratio that’s ballooned from just 61-to-1 in 1989, the left-leaning think tank’s study shows.

“Importantly, rising CEO pay does not reflect rising value of skills, but rather CEOs’ use of their power to set their own pay,” researchers Lawrence Mishel and Jori Kandra wrote in the report. “And this growing earning power at the top has been driving the growth of inequality in our country.”

Those figures are based on the Economic Policy Institute’s measurement of “realized” compensation — which counts the value of stock options when they’re exercised, usually after the stock price has risen, and the value of stock awards when they’re vested, meaning when the executive actually owns them.

The think tank also tracks compensation using the value of stock awards and options by their “fair value” when granted. Based on that formula, average CEO pay jumped 8.6 percent last year to about $14.5 million.

In either case, the growth in CEO pay is closely tied to the thriving US stock market because equity awards make up more than half of their total compensation packages, according to the report.

Amazon CEO Jeff BezosHindustan Times via Getty Images

That suggests corporate bosses will get even richer in 2020 given that stock prices are hovering near record highs despite the COVID-19 crisis sparking a historic economic downturn that put millions of Americans out of work.

Several CEOs have given up part or all of their base salaries as the pandemic pummeled their companies — but they “aren’t giving up a lot given how much of their pay comes from stock awards and options,” Mishel and Kandra wrote.

The report notes that the inflation-adjusted growth of the benchmark S&P 500 index was about 8 percent higher in the middle of this year than in 2019 as the stock market bounced back from its massive crash in February and March.

Chief executives’ realized pay surged more than 1,100 percent from 1979 to 2019 when adjusted for inflation, outpacing the stock market’s growth by about 50 percent while the typical worker’s compensation climbed just 13.7 percent in that same period, the report says.

As profits and stock market prices have reached record highs, the wages of most workers have grown very modestly, including in the recovery from the Great Recession,” the researchers wrote.