While American workers continue to struggle to receive pay raises, the same cannot be said for Chief Executive Officers according to a report released by benefits consulting firm Mercer.
The report revealed that CEO’s of major corporations have seen their average pay jump five percent over the last year to $10.3 million, a rise of 4 percent over 2013 figures. The average worker saw raises of just 2 percent.
The report comes at a time when there is much public scrutiny and criticism of CEO compensation levels with political experts saying this, along with how large corporations are avoiding proper reporting of their earnings, is likely to become presidential campaign issues.
Early this month the Securities and Exchange Commission (SEC) passed rules that require public companies to reveal the difference in pay between their chief executive and the average worker, but since the ruling, the SEC has been criticized for allowing too many loopholes for proper reporting of CEO salaries and company earnings.
A recent study released by the the Economic Policy Institute also showed that large public company chief executives have seen their pay “soar” in recent decades with the average CEO compensation being $16.3 million in 2014, a 997 percent increase since 1978, compared with only a 10.9% growth for the typical worker.
The Mercer report said that the focus on CEO pay has caused corporations to limit increases to fixed compensation. Although base salaries for CEOs saw little change in 2014 , “long-term incentives are fueling overall pay increases.”
The Mercer report analyzed the compensation totals for CEO’s at 174 companies in the S&P 500 and showed long-term incentives rising 6%, while short-term incentive pay rose 4%. In comparison the wages of American workers rose 2.1% for the year ended July 31.
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