CEO pay at US low-wage firms hits 614 times worker median, study finds

Institute for Policy Studies report shows CEO compensation grew twice as fast as worker pay since 2019

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By LineZotpaper

Published27 August 2026

Read Time3 min

Sources2 outlets

The average CEO at the 100 largest US corporations with the lowest median worker pay earned 614 times their typical employee last year, according to a new analysis by the Institute for Policy Studies (IPS). The report found that from 2019 to 2025, CEO compensation at these firms rose 41.4%—double the 20.7% increase in median worker pay over the same period.

The findings, published Wednesday in IPS's latest executive excess report, highlight a growing chasm between executive and worker compensation at some of America's biggest low-wage employers. The 100 S&P 500 companies analyzed span retail, food service, and other industries where hourly wages often hover near minimum pay floors.

The report notes that the 614-to-1 ratio is unadjusted for inflation. While CEO pay has surged, median worker pay at these firms rose from roughly $28,000 to $33,800 over the six-year period—far below what many consider a living wage.

Critics of the analysis argue that CEO compensation reflects market forces for rare talent and responsibility. The Business Roundtable, a lobbying group for top executives, has long maintained that pay packages are tied to performance and that boards act in shareholders' long-term interests. Compensation consultants also point out that stock awards—a large portion of CEO pay—may fluctuate with market conditions.

Supporters of stricter pay equity measures, however, contend that such ratios reveal structural inequities. "These numbers aren't just symbolic; they reflect a system where the rewards of growth flow overwhelmingly to the top," said Sarah Anderson, lead author of the IPS report. The study comes amid renewed scrutiny of corporate pay practices, with shareholder activists filing more "say-on-pay" proposals and some lawmakers proposing tax penalties for firms with extreme pay gaps.

The U.S. Securities and Exchange Commission currently requires public companies to disclose their CEO-to-median-worker pay ratio under Dodd-Frank rules, but the data is often buried in proxy statements. The IPS report focuses on the firms with the lowest median pay, casting a stark light on how corporate compensation affects lower-wage workers.

Proponents of the market-based approach caution against government intervention. "Imposing a cap or tax on pay ratios could push companies to offshore jobs or reduce base salaries for executives in ways that harm competitiveness," said James Matson, an economist at the American Enterprise Institute.

Still, the widening gap between CEO and worker compensation has become a flashpoint in debates over income inequality, especially as inflation has eroded purchasing power for low-income households. The IPS report adds fresh data to an ongoing policy discussion that shows no signs of resolution.

Analysis

Why This Matters

The 614-to-1 ratio underscores deepening income inequality in corporate America, where the highest-paid executives capture a growing share of national wealth.
For workers at low-wage firms, stagnant pay relative to CEO raises fuels demands for higher minimum wages, unionization, and corporate accountability.
The report could influence shareholder activism and legislative efforts, including potential excise taxes on excessive pay ratios or expanded SEC disclosure rules.

Background

The CEO-to-worker pay ratio has skyrocketed since the 1960s, when top executives earned roughly 20 times the average worker. By the 1990s, the ratio exceeded 100-to-1, driven by stock options and performance-based compensation. The Dodd-Frank Act of 2010 mandated pay ratio disclosure starting in 2018, giving investors and advocates a tool for comparison. Previous IPS reports have highlighted persistent disparities, but this analysis specifically targets the 100 lowest-paying S&P 500 corporations, where the gap is most extreme.

Key Perspectives

Institute for Policy Studies (IPS): Sees the ratio as evidence of a broken compensation system, advocating for higher wages and policies that curb executive excess, such as higher corporate tax rates on firms with large pay gaps. Business Roundtable and compensation consultants: Argue CEO pay is set by competitive markets for executive talent and tied to long-term performance. They warn that regulatory caps could hurt shareholder value and innovation. Worker advocacy groups and unions: Use ratios like this to amplify calls for living wages, collective bargaining, and profit-sharing, arguing that workers who produce the goods and services deserve a fairer share of corporate success.

What to Watch

The SEC's stance on CEO pay ratio disclosure rules under potential new leadership and whether enforcement actions increase.
Upcoming shareholder meetings at S&P 500 companies with low median pay; watch for "say-on-pay" votes and proposals to tie executive bonuses to workforce pay equity.
U.S. congressional hearings or legislation, such as the proposed "Tax Excessive CEO Pay Act," which would impose higher corporate tax rates on firms with ratios above 100-to-1.

Sources

CEOs earn 614 times more than workers at US’s 100 lowest-paying corporations — World news | The Guardian
CEOs earn 614 times more than workers at US’s 100 lowest-paying corporations — Business | The Guardian