CEO pay climbs nearly 10% in 2024, far outpacing worker wage growth

Compensation for CEOs at S&P 500 companies jumped nearly 10% in 2024, as stock prices surged and corporate profits swelled, continuing a trend of widening pay gaps between executives and average employees.

According to data analyzed for The Associated Press by Equilar, the typical pay package for S&P 500 CEOs who served at least two full consecutive fiscal years rose to $17.1 million, up 9.7% from the previous year. In contrast, the median employee at companies in the survey earned $85,419 — a 1.7% increase year over year, AP reported.

The AP’s annual survey includes data from 344 executives who filed proxy statements between January 1 and April 30.

Despite economic concerns such as lingering inflation and elevated interest rates, the stock market soared in 2024. The S&P 500 gained more than 23%, while corporate profits rose over 9%, driving up performance-based compensation. Many companies have shifted CEO pay toward stock-based awards, which are often conditional on future targets like share price increases or improved profitability.

“2024 was expected to be a strong year, so the (nearly) 10% increases are commensurate with the timing of the pay decisions,” said Dan Laddin, a partner at Compensation Advisory Partners.

Top-earning CEOs

Rick Smith, CEO of Axon Enterprises, led the list with a $164.5 million pay package. Nearly all of it consisted of stock awards tied to future performance through 2030. Axon, the maker of Tasers and body cameras, posted a record $377 million in net income and saw its shares more than double last year.

Other high earners included:

• Lawrence Culp, GE Aerospace – $87.4 million
• Tim Cook, Apple – $74.6 million
• David Gitlin, Carrier Global – $65.6 million
• Ted Sarandos, Netflix – $61.9 million

Most of these packages were heavily weighted toward stock and options. According to Equilar, the median value of stock awards climbed nearly 15%, while base salaries grew by only 4%.

“For CEOs, target long-term incentives consistently increase more each year than salaries or bonuses," said Melissa Burek, another partner at Compensation Advisory Partners. "Given the significant role that long-term incentives play in executive pay, this trend makes sense.”

Jackie Cook of Morningstar Sustainalytics noted that linking CEO pay to stock performance may reflect shareholder priorities but warned it has “led to a ‘phenomenal rise’ in CEO compensation ‘tracking recent years' market performance,’ which has ‘widened the pay gap within workplaces.’”

Notable omissions and exceptions

Some well-known CEOs were excluded from the rankings due to the survey's eligibility criteria. For instance, Starbucks’ Brian Niccol, whose 2024 compensation was valued at $95.8 million, only became CEO in September. Nvidia CEO Jensen Huang’s $49.9 million package was not included as the company filed its proxy after the survey's deadline.

Warren Buffett, known for his modest salary, was listed at $405,000—about five times the median worker's pay at Berkshire Hathaway. Tesla’s Elon Musk reported no compensation for 2024, although his 2018 stock package worth up to $56 billion remains under court review.

Widening pay gap

The median CEO earned 192 times what the median worker at their company made. In some industries, the disparity is even more striking. Carnival Corp. reported a CEO-to-worker pay ratio of nearly 1,300:1, and McDonald's was close behind with a 1,000:1 gap.

Private-sector wages rose 3.6% in 2024, with the average U.S. worker earning $65,460 annually, or $92,000 including benefits.

“With CEO pay continuing to climb, we still have an enormous problem with excessive pay gaps,” said Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies. "These huge disparities are not only unfair to lower-level workers who are making significant contributions to company value – they also undercut enterprise effectiveness by lowering employee morale and boosting turnover rates.”

Female CEO compensation hits record highs

The number of women on the list rose to 27, the highest since 2014. Their median compensation was $20 million — a 10.7% rise compared to 9.7% for male CEOs, who earned a median of $16.8 million.

Top-earning female CEOs included:

• Judith Marks, Otis Worldwide – $42.1 million
• Jane Fraser, Citigroup – $31.1 million
• Lisa Su, AMD – $31 million
• Mary Barra, General Motors – $29.5 million
• Laura Alber, Williams-Sonoma – $27.7 million

“There are maybe a couple more names on the list, but we’re really not moving the needle significantly,” said Christy Glass, a sociology professor at Utah State University. She cited the broader slowdown in corporate diversity, equity, and inclusion (DEI) efforts.

Security benefits on the Rise

Equilar found companies are increasingly offering security-related perks as part of executive compensation, possibly influenced by incidents such as the December shooting of UnitedHealthCare CEO Brian Thompson.

Among 208 companies reviewed, median spending on executive security rose from $69,180 in 2023 to $94,276 in 2024. Notable increases came from companies like Centene and Intel.