Why American CEOs Get Paid Way More Than CEOs Anywhere Else (Hint: It's Not Performance Based)

By Dean Baker

April 18, 2013  |  Top corporate executives have always been well-paid for obvious reasons. Running a major corporation is a demanding job; you would expect to pay a high salary to get and retain talented hardworking people.

But in the last three decades, the pay of CEOs has gone from just being high -- say 30 or 40 times the pay of typical workers -- to being in the stratosphere. The pay of CEOs at major corporations now averages several hundred times the pay of ordinary workers. Annual compensation packages routinely run into the tens of millions of dollars and can run into the hundreds of millions of dollars.

Furthermore, CEOs generally can count on big paychecks in good times and bad. They tend to do well even when their companies do poorly; although they can expect to do better when corporate profits or stock prices rise. This is true even when their actions had little or nothing to do with the increase. For example, the CEOs of the major oil companies got incredibly rich as a result of the run-up in world oil prices in the last decade.