CEO Pay Surpasses 632:1 Ratio Over Workers at Low-Wage Firms

A new report from the Institute for Policy Studies reveals a stark and widening divide between executive compensation and average worker earnings at the 100 largest low-wage employers in the United States, dubbed the “Low-Wage 100” [1]. The report, part of the annual “Executive Excess” analysis, highlights that CEOs at these firms are now paid 632 times more than the average worker, up from 560:1 in 2019 [1]. This pay ratio significantly exceeds the average for S&P 500 companies and underscores a broader trend of wealth concentration at the top.

According to the analysis, average CEO compensation at these companies rose 34.7% between 2019 and 2024, while median worker pay increased by only 16.3%—less than the 22.6% cumulative inflation over the same period [1]. The average CEO now earns $17.2 million annually, in contrast to the typical worker’s $35,570. At 22 of the companies, median pay actually declined over the six years. Starbucks set a particularly striking example, with its CEO earning $95.8 million in 2024 while the median worker took home only $14,674, resulting in a 6,666:1 pay ratio [1].

The report also highlights a pattern of corporate priorities that favor executives and shareholders over long-term investments in workers and facilities. Between 2019 and 2024, the 100 companies spent a total of $644 billion on stock buybacks, with 56 of them investing more in buybacks than in capital improvements. Lowe’s and Home Depot were among the largest spenders, with Lowe’s allocating $46.6 billion to buybacks—enough for a $28,456 annual bonus for every employee over six years [1]. This trend is echoed in the case of Ulta Beauty, where median worker pay fell by 46%, while CEO pay rose by 45%, and buyback spending tripled that of capital investment [1].

The growing pay gap is not unique to the Low-Wage 100. A broader March 2025 study by Compensation Advisory Partners found that among 50 publicly traded firms with annual revenues exceeding $1 billion, CEO pay increased by an average of 280%, even as median revenue growth dropped from 3.7% to 1.6% and earnings per share growth fell to near zero [1]. This suggests that performance-based incentives are increasingly disconnected from actual business outcomes.

The issue of executive overcompensation and excessive buybacks is also part of a broader national trend of wealth inequality. The Congressional Budget Office reported in late 2024 that the top 10% of U.S. households hold the majority of the country’s assets, with the top 1% controlling nearly a third [1]. Scholars have also documented the historical rise in CEO-to-worker pay ratios, from 21:1 in 1965 to 290:1 in 2023, and as high as 603:1 in 2022 for 100 S&P 500 companies [1].

The report calls for legislative action to address these imbalances, including higher corporate taxes for firms with large pay gaps, increased stock buyback excise taxes, and restrictions on buybacks for companies receiving government contracts or subsidies. These measures have gained support from both the public and policymakers, with 80% of likely voters in a 2024 survey backing reforms to curb excessive executive pay [1].

Critics argue that the current economic model, driven by shareholder primacy and falling corporate tax rates, has led to a concentration of profits at the expense of worker welfare. As Irit Tamir, senior director of Oxfam America’s private sector department, explained in an interview, this “perfect storm” has allowed corporate profits to be funneled increasingly to a small group of individuals [1]. Drew Hambly of CalPERS, the country’s largest public pension fund, has also warned of the negative long-term consequences of such imbalances, including rising worker unrest and corporate instability [1].

Sources: [1] [title: Wealth Inequality: CEO-Worker Pay Gap Widens at Low-Wage Employers](https://fortune.com/2025/08/21/wealth-inequality-ceo-worker-pay-gap-low-wage-employers/)