Key findings:

• CEO pay at the top 350 U.S. firms rose 14.0% in 2025 to an average of $27.9 million.
• CEOs made 325 times as much as the typical worker in 2025. It hasn’t always been this way. In 1965, CEOs were paid 21 times as much as a typical worker.
• From 1978–2025, top CEO compensation skyrocketed 1,316% while typical workers’ compensation increased only 28%.
• CEO pay has not climbed so fast because their skills or productivity rose spectacularly. It has risen instead simply because CEOs have gained and used increasing leverage over the corporate boards that set their pay.
• Policymakers can rein in excessive CEO pay through more progressive tax policy, corporate governance reforms, and strengthened labor standards, including laws that make it easier for workers to unionize. One new EPI policy proposal calls for default collective bargaining at firms where the CEO-to-worker pay ratio is especially exorbitant.

Our latest analysis finds that CEO pay rose 14.0% at the top 350 U.S. firms in 2025 as the CEO-to-worker pay ratio hit 325-to-1.

Between 1978 and 2025, CEO pay jumped an astronomical 1,316% while typical workers’ pay only rose 28%. As a result, the CEO-to-worker pay ratio increased more than tenfold since 1978.

Figure A demonstrates the rise in the CEO-to-worker pay ratio using both the realized and granted CEO compensation measures (for more on our methods and additional analysis, see EPI’s CEO pay landing page). The pay ratio increased a modest amount between 1965 and 1978, but then exploded in the late 1990s and has remained extraordinarily high since then, ebbing some during recessions and stock market losses.

CEO Pay

Media reports have called attention to Elon Musk’s Tesla pay package for 2025, which the company reports as $158 billion. We should note that this $158 billion is not in our measure of CEO pay—largely because it was not paid and likely never will be—and therefore cannot explain the uptick in CEO pay in 2025. The $158 billion refers to the potential pay Musk could receive only if Tesla meets a number of performance metrics related to its output and share price in coming years. Most market observers deem it highly unlikely that Tesla will meet these metrics, and a large portion of this $158 billion has already been “lost” since some of the performance metrics were required to be met in 2025 and were not. In some ways, the $158 billion expense reported by Tesla is just an accounting exercise—the amount that other shareholders’ stock would have been diluted had the performance metrics been met.

CEO pay is strongly related to the stock market, though less on stock options

The jump in CEO pay in 2025—though striking—isn’t surprising given how closely CEO pay tends to track gains in the stock market, as the S&P 500 rose a similar 11.8% in 2025.

While salaries were only about 5% of total CEO pay in 2025—which averaged $27.9 million—the vast majority of CEO pay (82%) was in the form of stock options or stock awards. However, there has been a marked shift away from stock options to stock awards over the past two decades. As Figure B shows, the share of compensation in stock options has fallen from 85% in 1992 to 26% in 2025.

CEO Pay

This shift to stock awards has been driven by executives’ search for lower taxes as well as regulatory changes made in the early 2000s. Stock options are more likely to be considered ordinary or W-2 income rather than other stock-based pay, which is taxed at a lower rate. Further, companies used to be able to offer stock options to executives without notifying shareholders of the expense. But a regulatory change after 2006 required the full expensing of stock options in reports to shareholders, making them appear more costly to grant.

While tax incentives and these regulatory changes may have incentivized this shift away from stock options, this shift has also likely led to a slightly better alignment of CEO pay to longer-term company success. Stock options allow executives to benefit from rising stock prices, but do not penalize them for falling prices. Stock awards, conversely, expose executives to the cost of falling stock prices as well as the benefits of rising prices. While an improvement, the shift from stock options to stock awards has obviously not been a transformational win for making CEO pay more generally fair and rational.

This shift from stock options to stock awards also has implications for the measured share of corporate-sector income accruing to capital versus labor. Over a full business cycle, the labor share of income has often reflected the leverage workers have to increase their wages versus capital owners’ ability to keep revenue in the form of profits (see Figure C). For arcane tax and data reasons, income from stock options is more likely to be recorded in economic data as labor earnings than is income from other forms of stock-based pay. Therefore, some of the losses in labor’s share of income in Figure C may be in part due to the changing ways top executives are receiving their compensation rather than simply the unequal balance of power between capital and labor.

CEO Pay Policymakers can rein in excessive CEO pay

The rapid growth in CEO pay over the last several decades has not been driven by rising CEO productivity. Instead, it has simply been the result of executives’ ability to leverage their political and economic power to increase their own pay. As such, excessive pay can be reined in with policy changes.

Policymakers can alter tax policy to lower incentives for excessive CEO pay and change corporate governance laws to give shareholders greater ability to penalize excessive pay packages. Lawmakers can also strengthen labor standards to give workers more leverage to secure a larger share of the income generated by the firm, leaving less for CEOs (and shareholders) to claim.

Policymakers can further boost leverage for typical workers by strengthening the right to organize and form unions. For starters, Congress can pass the Protecting the Right to Organize (PRO) Act to make it easier to organize for the tens of millions of U.S. workers who want unions at their workplace. Further, policymakers can pass legislation instituting default collective bargaining when CEO-to-worker pay ratios are especially exorbitant.

Below, EPI senior economist Elise Gould offers her insights on today’s release of U.S. Census Bureau data for 2025 on annual earnings, income, and poverty. Read the full thread here. 

 

This morning, the Census Bureau is releasing the latest data on Income, Poverty and Health Insurance!

Note: these data are for 2025 and will not reflect changes in the labor market, rising inflation, and attacks on vital safety net policies, hitting families in 2026.

www.epi.org/blog/2025-ce…

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— Elise Gould (@elisegould.bsky.social) 8:58 AM · Sep 15, 2026

Real median household income rose 2.6%, while the official poverty rate fell 0.5 percentage points. The supplemental poverty rate was 13.1%, no change from 2024.

Income inequality rose in 2025, as high-end household income increase 1.7% while lower-income households saw no change in their incomes.

— Elise Gould (@elisegould.bsky.social) 9:10 AM · Sep 15, 2026

Median household income rose 2.6% between 2024 and 2025. Black households experienced the largest increase in income (4.8%), though Black median income remains significantly lower than any other group: $59,980 for Black households versus $96,710 for white and $126,300 for Asian households.
#EconSky

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— Elise Gould (@elisegould.bsky.social) 9:16 AM · Sep 15, 2026

Household income at the 90th percentile and the 50th percentile rose 2.8% and 2.6%, respectively, while household income at the 10th percentile saw no improvements (-0.8%). As a result, key measures of inequality: the 90/10 and 50/10 income ratios both increased.
#NumbersDay

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— Elise Gould (@elisegould.bsky.social) 9:31 AM · Sep 15, 2026

Median earnings for full-time workers was $66,620 in 2025, not significantly different from 2024. However, median earnings rose for women (3.2%) and were unchanged for men. Together this led to an increase in the female-male earnings ratio, hitting 83.9%, up from 80.6% in 2024.

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— Elise Gould (@elisegould.bsky.social) 9:40 AM · Sep 15, 2026

The supplemental poverty measure is a key poverty indicator using an expanded definition of resources and costs. In 2025, the supplemental poverty was unchanged.

Social Security remains the most important anti-poverty program in the United States, lifting 28.8 million people out of poverty in 2025.

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— Elise Gould (@elisegould.bsky.social) 9:48 AM · Sep 15, 2026

When workers seek to form a union, employers often respond by hiring union-avoidance consultants to dissuade workers from their organizing efforts. A recent EPI and LaborLab report estimates that employers spend over $1.5 billion each year on union avoidance. Last week, our partners at LaborLab released new tools that shed light on the highly secretive and highly profitable union-avoidance industry.

The Union-Busting Cost Calculator helps workers estimate how much their employers are spending on union-avoidance consultants, instead of investing that money in their workplaces. Too often employers claim unions are third parties that disrupt workplace dynamics and create costs for workers who are paying for representation they don’t need. On the contrary, unions win wage increases and benefits for workers, and it is employers who spend millions on third-party union-avoidance consultants, rather than raising workers’ wages and improving working conditions. Further, employers often hire the same consulting and law firms to help with their union avoidance. LaborLab’s union-buster search helps demystify who the key actors are in the union-avoidance industry and identify who is behind anti-union campaigns.

If workers understand who their employers are hiring and how much they are spending on union avoidance, this will empower workers in their organizing campaigns. The union-avoidance industry has a devastating impact on workers’ ability to organize in the United States. That is because decades of federal policy and court decisions have weakened federal labor law to the point that employers violate the law with impunity. Union-avoidance consultants and law firms exploit these weaknesses to reach the same goal: to defeat the union. This has caused a significant decline in unionization rates in the United States: Only 1 in 10 workers are represented by a union today, compared with 1 in 3 during the 1950s. It is well documented that the decline in unionization has contributed to increased inequality over the past 45 years.

However, this hasn’t dissuaded workers from organizing. Workers across industries—from graduate students to nurses to baristas—are forming unions and collectively bargaining over improved pay, benefits, and working conditions. In 2025, more than 16.5 million workers were represented by a union, which is the highest level recorded in 16 years.

It should be no surprise that workers are seeking to form unions, even with the odds stacked against them. Unionized workers are more likely to have higher pay, access to employer-sponsored health insurance and retirement, and safer working conditions compared with nonunion workers. Further, the benefits of unions go beyond a single workplace; they also help create stronger communities. Much like unions are a tool to rebalance unequal bargaining power in the labor market, resources like LaborLab’s Union-Busting Cost Calculator and the union-buster search can help even the playing field for workers.