New data shows that CEO pay climbed up nearly 6% in 2024. Within the top 350 US companies, average CEO pay, including benefits like stock awards, rose to $22.98 million in 2024. We’ve spent much time over the last two years discussing the exorbitant raises proposed for prominent CEOs like Elon Musk, whose $1 trillion compensation plan has repeatedly been the talk of the town. While his pay at Tesla has been the most hotly debated earnings in recent times, it is apparent that CEOs at large are enjoying the considerable benefits that come with standing at the top of the organizational hierarchy.
In 2025, we have seen a fair share of CEO oustings and constant fluctuations within C-suite executive roles across industries, but those who have held on to their roles have been on the receiving end of substantial pay. While the CEO pay growth in 2024 has been great news for those in such positions, there is considerable tension brewing among workers who are underpaid and at risk of losing their jobs at any moment. Handling the fallout from the unbalanced CEO pay vs worker pay ratio always falls to HR, putting them in a delicate position that requires addressing.
CEO pay went up by nearly 6% in 2024, 281 times higher than the average worker’s. These disparities demand HR step up to balance the playing field. (Image: Pexels)
CEO Pay up 6% in 2024: The Rise in Compensation Puts HR in a Delicate Position
Analysis by the Economic Policy Institute found that in 2024, CEO compensation surged by almost 6% compared to 2023, with median pay ratios reaching 281:1 compared to the average worker. The data also showed that when compared to the top 0.1% of workers in 2023, CEOs were making 7.5 times their compensation.
“This suggests that CEOs are not paid extraordinary amounts because of any special skills or greater productivity, but because they have extraordinary leverage over corporate boards that set their pay. If CEOs were paid less, there would be no loss of productivity or output in the economy,” the EPI explained in its report.
The evidence of this rise has been clear to see, with scrutiny of high-profile cases like Oracle and Tesla, sparking considerable debate over the possible justification of such pay packages for the top guns when employees on the lower rungs of the organization are underserved.
The widening CEO-to-worker pay gap amplifies the pressures on HR to justify the executive packages while maintaining relations with employees asking for increases in their compensation. HR’s roles come with demands of fairness and transparency. Not every member of the HR team gets to have a say in employer compensation plans, but it does often fall to the HR team to verify whether CEO compensation increases align with the market as well as the performance of the organization at large.
The CEO Pay Jump in 2024 Explained by the EPI
Not all CEOs are paid equally or on the same terms. In many cases, CEOs are required to meet specific benchmarks to qualify for the entity of their pay. When a company flourishes, the value of its stock goes up, and so do the compensation bonuses offered to CEOs. In most other cases, CEO pay is determined at the time of hiring, divided into pay and other stock and monetary benefits that raise the value of the package.
“CEOs do not work 281 times harder than the typical worker—they just have the power to set their own pay, and the dysfunctional labor market for corporate executives doesn’t provide any effective discipline against this. Policies that limit CEOs’ ability to extract excessive compensation are one set of reforms needed to end the winner-take-all aspect of economic life in the U.S.,” Josh Bivens, EPI chief economist, commented in the report.
“Stratospheric” CEO pay packages are often justified by the critical roles that these leaders play in guiding the organization towards success. CEOs are often held accountable for a company’s failings and replaced as a result. But unfortunately for employees, they face the same fate when a business underperforms without as big a nest egg to fall back on.
Paying Attention to Pay Equity and Internal Benchmarking
To promote a culture of fairness, it is essential for organizations to use resources like Mercer surveys to benchmark C-suite pay against competitors. Data-driven audits are a useful tool when assessing pay packages for any employee, and this is just as important to conduct when recruiting CEOs.
It also helps to proactively disclose pay ratios internally and equate compensation with the value of contributions to the organization. This ensures that there are some stabilized standards used to determine how and why CEO wages outpace workers.
Clarity on these aspects makes it easier to scale CEO pay with performance and make adjustments when necessary. Using data as the basis for building a package can go a long way in ensuring that there is no fallout, such as employee resentment or shareholder revolts, from the proposed offerings.
As CEO Compensation Increases, Employee Morale Often Sinks
The CEO pay jump in 2024, as reported by the EPI, is largely a positive upward trend, especially when it is scaled according to the success of the organization. However, it is also worth considering the employee skepticism and resentment that rise with high CEO pay, particularly when their own salary increments lag. Such sentiments channel energy towards negative outcomes and performance results when employees feel their contributions will not be fairly evaluated.
The interplay between pay equity and morale forces HR to act as a mediator and advocate for parallel investments in employee development programs. Signaling commitment to employees is not a dismissible task, especially when data shows that linking CEO bonuses to employee satisfaction metrics reduces turnover by 8%.
With CEO Wages Far Outpacing Workers, HR Teams Need to Level the Playing Field
HR teams that roll out campaigns to foster engagement through other non-monetary benefits are often able to mitigate some of these strained feelings among employees. Using available tools to gauge employee morale post-disclosure and addressing their concerns during town hall meetings can help offer employees greater clarity on where things stand.
The most successful strategy, however, is to narrow the CEO pay vs worker pay ratio. This is often a difficult change to enforce in the capitalistic set-up that governs operations today. While this change is a long way off, HR teams have much work to do in ensuring that employees are rewarded with upskilling and retraining programs, flexible work arrangements, health benefits, and other employee bonuses that mirror C-suite incentives, fostering a shared purpose and background for employees and CEOs to operate on.
In 2025, HR’s ability to bridge these challenges will define its role as a strategic partner, fostering workplaces where equity and engagement coexist.
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