Posted by Kathryn DeHart
On average, CEOs at top US companies make 281 times as much as the average worker—partly due to valuable stock options that are frequently included in executive compensation packets.
Findings
Additional insights we found via this resource
In 1993, President Bill Clinton passed a law that capped how much companies could deduct from corporate taxes for executive pay at $1M.
Pay-for-performance, which often includes stock awards, wasn’t impacted by the 1993 rule change, so more pay packets included stock options if CEOs hit certain growth benchmarks.
Stock options aren’t traditional salaries, but they allow CEOs to sell shares at an agreed-upon price and pocket the money, which essentially adds to their compensation.
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