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Average pay of CEOs of S&P 500 companies rose to record $22.8 million following Elon Musk’s nearly $1 trillion compensation, AFL-CIO finds
Excluding Musk, the average compensation for S&P 500 chief executives jumped 21% to a record $22.8 million in 2025, data released on Thursday by the AFL-CIO showed. It was the highest figure since the AFL-CIO began tracking CEO pay in the 1990s.
Labour officials attributed the increase to a growing number of mega-pay packages inspired by Musk’s Tesla compensation plan, which could be worth as much as $1 trillion if he meets all its targets.
Tesla shareholders approved the restricted-stock plan in November, with the company valuing it at $158 billion. Including that amount, average S&P 500 CEO compensation reached $340.1 million last year, according to the AFL-CIO’s latest Paywatch study.
Musk also became the world’s first trillionaire based on his stake in satellite and AI company SpaceX.
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Musk’s pay “changes the dynamic when other CEO compensation plans come up, boards use it as a reference,” Fred Redmond, the AFL-CIO’s secretary-treasurer, told Reuters in a telephone interview.
Meanwhile, employee wages are being held back by the rise of artificial intelligence and a Republican-led National Labour Relations Board, which labour leaders view as hostile to union-organising efforts, Redmond said.Excluding Musk’s Tesla compensation, the average CEO-to-worker pay ratio at S&P 500 companies widened to 312:1 last year from 285:1 in 2024. Including Musk’s package, the ratio reached 5,387:1.
“As we talk to our members, they’re pissed off over what’s happening to them, and they feel as though they should be more vocal in terms of calling attention to inequality,” Redmond said.
He noted that union representation had reached its highest level in 16 years.
Rising CEO pay and inequality have fed into broader political debates over why US workers struggle to afford housing, healthcare and other necessities.
The mean annual wage for US workers was $69,770 in May 2025, up 3% from a year earlier, according to Labour Department data.
Corporate compensation committees often argue that executive pay plans are tied to shareholder value and incentivise executives to deliver results. They also note that investors, including the largest asset managers, usually support such proposals at annual meetings.
Average shareholder support for advisory “say-on-pay” votes at S&P 500 companies stood at 90.6% through late June, according to compensation consultancy Semler Brossy, up from 89.4% for all of 2025.
Special awards draw scrutiny.
Shareholders have been less supportive of the growing number of special compensation awards, Semler Brossy found.
“These awards, which are usually intended to be one-offs and exist outside of annual compensation programs, are a hot-button issue,” the firm found.
Among S&P 500 companies that disclosed special awards, Goldman Sachs paid CEO David Solomon $118.9 million last year, including a major retention award. About 71% of votes cast backed the package, well below the broader S&P 500 average.
“We’re very pleased with the strong supermajority this vote received,” Goldman Sachs spokesperson Tony Fratto said.
Real estate investment trust Welltower awarded CEO Shankh Mitra $821 million, intended to cover most of his compensation over the next decade. Only 19% of votes cast supported the package.
“Welltower’s board and compensation committee remain committed to engaging with shareholders to gather their feedback and understand their perspectives,” a spokesperson told Reuters.
The spokesperson added that Mitra would receive the full amount only if he met all performance targets.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
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