Key facts
- Average CEO compensation for S&P 500 companies reached a record $22.8 million in 2025.
- This represents a 21% increase from the previous year.
- Mega-pay plans inspired by Elon Musk's compensation at Tesla are a key driver.
- The CEO-to-worker pay ratio at S&P 500 companies was 312:1 in 2025, excluding Musk's pay.
- Shareholder support for 'say on pay' votes averaged 90.6%.
Extraordinary compensation packages for Elon Musk have paved the way for CEOs of other S&P 500 companies to receive substantial pay increases, according to a new study by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).
In 2025, the average compensation for chief executives in the S&P 500 surged 21% to a record $22.8 million, excluding Musk's pay. This figure marks the highest amount recorded since the AFL-CIO began tracking CEO pay in the 1990s. Labor officials attribute this rise to an increasing number of large-scale pay plans that are modeled after Musk's compensation deal at Tesla, which could be worth up to $1 trillion if all targets are met. Shareholders approved a restricted stock plan for Tesla valued at $158 billion in November.
Including Musk's Tesla compensation, the average S&P 500 CEO pay reached $340.1 million last year. Musk also became the world's first trillionaire, based on his stake in SpaceX. Fred Redmond, the AFL-CIO's secretary-treasurer, stated that Musk's pay "changes the dynamic when other CEO compensation plans come up, boards use it as a reference."
The widening pay gap between CEOs and workers is fueling anger among labor unions. Redmond noted that employee wages are being suppressed by factors such as artificial intelligence and a National Labor Relations Board perceived as hostile to union organizing. The average ratio of CEO-to-worker pay at S&P 500 companies rose to 312:1 in 2025, excluding Musk's compensation, up from 285:1 in 2024. When Musk's Tesla compensation is included, the ratio reached 5,387 to 1 last year. Redmond expressed that members are "pissed off" about the inequality, with union representation at its highest level in 16 years.
This trend of rising CEO pay and inequality connects to broader political discussions about the affordability of housing, healthcare, and other necessities for U.S. workers. Mean annual wages for all U.S. workers were $69,770 as of May 2025, a 3% increase from the previous year, according to the U.S. Labor Department.
Corporate compensation committees often defend their pay plans by arguing they are tied to shareholder value and incentivize executive performance. They also point to investor support, with the largest asset managers typically backing these plans at annual meetings. Average support for advisory "say on pay" votes at S&P 500 companies stood at 90.6% through late June, an increase from 89.4% for all of 2025, according to compensation consulting firm Semler Brossy.
However, the proliferation of special pay awards, often intended as one-off bonuses outside regular compensation programs, is a contentious issue. Semler Brossy noted that these awards are a "hot-button issue." For instance, Goldman Sachs CEO David Solomon received $118.9 million in 2025, including a major retention award, but only 71% of shares cast supported his pay, below the average. A Goldman Sachs spokesman stated they were "very pleased with the strong supermajority this vote received." Similarly, Welltower CEO Shankh Mitra was paid $821 million, intended to cover most of his pay over the next decade, but only 19% of shares cast supported it. A Welltower spokesperson indicated the board is committed to engaging with shareholders for feedback.