How CEO Pay Stretched So High It Left Worker Wages on the Ground
If worker productivity is up, why aren’t wages? Explore how executive pay soared while the people doing the work were left behind.
Imagine your team rowing a corporate galley. You’re drenched in sweat, morale slightly below sea level, and someone just emailed you asking for the thing they were literally copied on. The oars feel smaller than they did last quarter, and there are definitely fewer rowers now, thanks to the last “efficiency review.” But you’re still rowing. Faster. Harder. Because productivity, we’re told, must always go up.
Then you glance forward and there’s your CEO. Not rowing. Not even on the same boat. He’s aboard a chrome-plated speedboat named Deferred Equity, being towed by your ship. He’s relaxed, cocktail in hand, waving supportively like a cruise director. “You’re making great progress!” he says, as if your 2 percent merit increase was a personal favor.
And this image isn’t theoretical. The median S&P 500 CEO now makes nearly 300 times what their median employee earns. This isn’t a thought experiment. It’s how things are.
Defenders have endless charts and consultant-crafted narratives to explain it away. But for the rest of us, the pay gap has started to feel like the economy’s version of a comedy sketch that no one is laughing at anymore. Except, of course, the guy in the yacht.
“It’s Totally Earned,” Said Every CEO Who Just Cashed In on a Bull Market
Let’s give credit where credit is due: CEOs are under pressure. Their calendars are full. Their inboxes overflow. There’s the quarterly earnings call, the strategic offsites, the difficult task of nodding thoughtfully during presentations made by someone who actually understands the product.
Boards love to present CEO compensation as the natural result of growth. “Firms are bigger. Global supply chains. Digital disruption. Complexity.” And yes, companies are larger and arguably harder to run than they were in the 1970s. But this narrative conveniently skips a few pages. It assumes that only one person, at the very top, evolved with the times. It imagines the CEO leveled up while everyone else stayed in 1995.
The reality is workers also adapted.
They got faster, leaner, more productive.
They absorbed five roles into one after a hiring freeze.
They watched training budgets shrink while performance expectations ballooned.
Productivity per worker rose sharply, but strangely, no one updated their compensation model.
Meanwhile, CEO pay exploded over 1,000 percent. Worker pay crawled along at one-tenth that. CEOs “earned” their pay increases the same way cruise ships “earn” their speed… by riding waves someone else is paddling under the surface.
The most common justification? Performance-based equity. Which would be more convincing if stock performance weren’t driven largely by market cycles, buybacks, and interest rate decisions made by the Federal Reserve. At this point, the only real performance requirement is staying employed while the market goes up.
So yes, CEOs are “earning” their pay, in the sense that lottery winners earn theirs by scratching in the right spot.
The Productivity Pay Gap: Brought to You by Selective Amnesia Inc.
Workers today are somehow producing more with less of everything.
Less headcount.
Less support.
Less budget.
Occasionally, less sleep.
This rise in productivity didn’t come from nowhere. It came from relentless pressure, constant adaptation, and the slow replacement of three-person teams with one overworked human.
You’d think a productivity boom would trigger widespread economic celebration. Higher output per worker? Surely that means higher wages for the people doing the outputting, right? Right?
Apparently not. Because while executives bask in performance bonuses for overseeing companies that didn’t spontaneously combust, the people actually making the machine run are left wondering when “doing more with less” turned into “getting less for doing more.”
Between the 1980s and now, productivity grew significantly, while real wages for the average worker barely budged.
This mismatch isn’t accidental. It’s what happens when the system is optimized to reward capital holders and executives with equity grants, while the rest of the workforce gets warm feelings and a pat on the back.
Boards justify CEO pay with complex performance metrics and peer comparisons. But when it comes to workers? Suddenly it’s market constraints, automation risk, and a heavy sigh about margins. It’s not that there’s no money. It’s just being funneled to the top shelf and shrink-wrapped in stock awards.
So if you’ve ever wondered why working harder doesn’t feel like getting ahead, now you know. The performance is real. The recognition? That got outsourced years ago.
CEO Compensation: Now With 300% More Luck, 0% More Accountability!
There’s a highly profitable cottage industry dedicated to justifying how much CEOs get paid. It involves consultants, spreadsheets, euphemisms like “alignment” and “talent retention,” and something called a “peer group,” which often includes companies that are conveniently larger, more profitable, or just better at lobbying their board to approve wild paydays.
The result is a feedback loop: if another CEO got $30 million, yours deserves at least $32 million, for morale.
Stock-based compensation is praised as performance-based, until it isn’t. If the stock goes up, it’s genius. If it goes down, it’s the macro environment. Either way, the grant’s already in the bank. Mega-packages are designed to “incentivize long-term thinking,” but the only long-term result is compounding wealth rather than accountability.
The median CEO-to-worker pay ratio now flirts with 300 to 1. For reference, that means if you make $60,000, your CEO just picked up a cool $18 million and probably didn’t have to fill out a mid-year self-evaluation form.
Meanwhile, employees grind out work under “pay-for-performance” policies where the performance is scrutinized to the decimal and the pay might cover half a rent increase if the stars align.
And yes, pay-for-luck is still going strong.
Oil execs rake it in when commodity prices spike.
Bank CEOs celebrate rate hikes like they authored them.
Tech CEOs? Just add “AI” to a press release and watch the restricted stock roll in.
If worker pay followed the same logic, every time someone debugged a production issue at 2 a.m., they’d wake up with equity, a signing bonus, and their name on a conference room.
The Cleanest Dirty Shirt: Why Everyone Shrugs and Moves On
By now, we’ve all just sort of… accepted it. That’s the craziest part. A CEO makes 300 times what the average employee earns, and the corporate world barely reacts. Some mild frustration, then a shoulder shrug, and on with the day.
The problem isn’t just the ratio. It’s how utterly routine it has become. Part of this normalization comes from a flimsy governance system. Take “say-on-pay” votes. These non-binding shareholder rituals pass more than 90 percent of the time, even when the compensation packages in question look like the prize wheel from a billionaire’s casino.
And disclosure? Technically, it’s all there. Buried in the proxy statement, somewhere between the legalese about deferred stock units and the explanation of why flying private was necessary for “security reasons.” The median employee’s pay is listed too, assuming you can decode how they chose to define “employee.”
Meanwhile, companies quietly lower their reported ratios with tricks like outsourcing low-paid roles, shifting operations offshore, or classifying the cafeteria worker in Dublin as part of the median. What counts, it turns out, depends on who is doing the counting.
When pressed, executives deliver the standard playlist:
“The market demands it.”
“Shareholders are happy.”
“It’s competitive.”
There’s always a reason, and never a solution.
And so we end up with a corporate structure that rewards distance. The further removed you are from the daily grind, the higher your compensation climbs. Those keeping systems online, inventory moving, and customers vaguely satisfied? They’re told to be leaner, hungrier, and “more agile.”
This conversation isn’t about demonizing wealth or suggesting every CEO should earn the same as their staff. Most people aren’t allergic to success. But there’s a difference between success and extraction. The problem isn’t that CEOs make a lot. It’s that they now make so much more than everyone else, even when the entire system’s value is clearly being driven by collective effort, not singular brilliance.
It’s become easy to justify. Every chart, every consultant report, every “shareholder value” argument seems designed to make you forget that worker productivity soared too. The difference is CEOs had a channel to collect on that growth, and most workers didn’t.
This pay ratio isn’t just a statistic. It tells us who the system was redesigned to serve, and who it quietly passed over. If nothing changes, we may look back in twenty years and consider today’s 300-to-1 gap quaint. That possibility alone should make us pause.
If we care about fairness, sustainability, or even basic functioning capitalism, the hard questions need to come now. Questions about how value is created, who shares in it, and how long we want to pretend this is all working fine.
At StratEx - Indonesia Business Advisory we advise boards and HR leaders on ethical, sustainable, and performance-driven pay structures. Contact us to build total rewards strategies that engage employees.