(Adds details on wages, AFL-CIO comment)
By Ross Kerber and Peter Szekely
BOSTON/NEW YORK May 9 A wide and longstanding
gap between the earnings of U.S. CEOs and workers shows no signs
of narrowing, according to a labor group analysis released on
Chief executives of S&P 500 companies surveyed were paid on
average $13.1 million last year, 347 times the pay of the
average U.S. worker, according to the AFL-CIO, the largest
federation of U.S. labor unions.
That gap was up from 335 times worker pay in 2015,
reflecting a widening income inequality, said the labor group,
which posted the latest figure on its website.
The AFL-CIO used the survey release to highlight slow U.S.
wage growth and the outsourcing of jobs to countries with lower
wages. Corporate directors were at fault for enabling top
executives' pay, even when investor returns lag, AFL-CIO
President Richard Trumka said.
"The system is rigged," he said in an interview with CNBC.
"We think shareholders ought to become more active and lower
those (executive pay raises), and that workers ought to get a
bigger share of the wealth they produce."
The labor group's annual study often draws notice as a
measure of how U.S. workers are largely not sharing the economic
gains of those at the top of the income scale, even as official
unemployment remains low.
Dissatisfaction among those workers was one reason many
backed Donald Trump in last year's U.S. presidential election.
U.S. investors tend to support the current CEO pay levels,
however. In the advisory votes that S&P 500 companies held for
their shareholders on executive pay last year, they received
average support of 91 percent, according to consulting firm
Semler Brossy. Only six companies received less than 50 percent
support in the advisory votes.
For its study the AFL-CIO analyzed available filings from
419 companies in the S&P 500 index. It found the average pay of
CEOs was roughly $13.1 million in 2016, a 6 percent increase
over the prior year.
In contrast, the average annual pay of production and
non-supervisory workers in the United States was $37,632, a 2
percent increase, the labor group said, citing figures from the
Bureau of Labor Statistics, a Department of Labor agency.
The AFL-CIO said that when adjusted for inflation, U.S
worker's wages have been stagnant for 50 years. Adjusted for
inflation, production and non-supervisory workers averaged
$41,473 a year in 1967, for instance.
U.S. CEO pay is often higher than in other countries because
of the widespread practice of using "peer group" averages to set
pay, AFL-CIO officials said in a conference call with reporters.
One improvement could be to make shareholder votes on pay
binding, as they are for British companies, they said.
The AFL-CIO's measure of pay differences is imperfect
because it does not compare executives directly with their own
employees. A rule dating from the administration of Democratic
former President Barack Obama that is slated to go into effect
next year would require most publicly listed U.S. companies to
disclose the ratio of their CEO pay to that of the median pay of
Michael Piwowar, a Republican member of the U.S. Securities
and Exchange Commission, said in February that the agency was
seeking comments about whether to delay the rule and whether
companies might face challenges with compliance, prompting calls
from Trumka, pension funds and others in support of the
(Reporting by Ross Kerber in Boston and Peter Szekely in New
York; Editing by Frances Kerry)