New research by the Institute for Policy Studies reveals that executive pay at some of America’s lowest-paying large firms rose nearly 35 percent between 2019 and 2024, while worker wages failed to keep pace. The findings highlight a widening CEO-to-worker pay gap, raising concerns about inequality, labor conditions, and corporate governance.
The Widening Pay Gap
The 100 S&P 500 companies with the lowest median worker pay – dubbed the “Low-Wage 100” – saw the CEO-to-worker pay ratio increase from 560 to 1 in 2019 to 632 to 1 in 2024. CEO compensation grew by 34.7 percent, while median worker pay rose only 16.3 percent, falling short of the 22.6 percent inflation rate during the period. Average CEO compensation reached $17.2 million, compared to median worker pay of $35,570.
Case Studies and Extreme Gaps
Starbucks showed the most striking disparity. CEO Brian Niccol earned $95.8 million in 2024, 6,666 times the company’s $14,674 median pay. Ulta Beauty reported a 46 percent drop in median worker pay to $11,078 after increasing its part-time workforce. Meanwhile, 22 of the 100 firms actually reduced median worker pay between 2019 and 2024, worsening the imbalance.
Stock Buybacks and Shareholder Focus
The report found that Low-Wage 100 firms spent $644 billion on stock buybacks over the five-year period, often prioritizing shareholders over employees. Lowe’s alone spent $46.6 billion, equivalent to $28,456 per employee, while Home Depot spent $37.9 billion. More than half of the firms spent more on buybacks than on capital improvements.
Worker and Policy Implications
Critics argue the growing pay gaps undermine workforce morale and long-term corporate growth. Drew Hambly of CalPers told regulators that boards should consider the well-being of their lowest-paid employees, as they represent the face of many businesses. The report also links 32 billionaires to these firms, including eight from Walmart and four from Estee Lauder. Policy solutions proposed include taxing companies with CEO-to-worker pay ratios above 50 to 1 and increasing taxes on stock buybacks.
Conclusion
The Institute for Policy Studies report underscores a troubling trend: while executives enrich themselves and corporations reward shareholders through buybacks, many employees face stagnating or declining wages. Without regulatory changes, critics warn this imbalance could damage both economic stability and corporate reputation in the years ahead.