Average pay for chief executives at S&P 500 companies climbed to a record $22.8 million in 2025, a 21 percent jump from the year before, according to new data from the American Federation of Labor and Congress of Industrial Organizations.
The figure, reported initially by Reuters and disclosed in the labor federation's closely watched annual Paywatch study, marks the highest average CEO compensation the AFL-CIO has recorded since it began tracking the data in the 1990s.
Behind the surge is a wave of "mega-pay" packages that boards are modeling on Tesla chief executive Elon Musk's extraordinary compensation deal, according to labor officials who compiled the report. Tesla shareholders in November approved a restricted stock plan for Musk that the company valued at $158 billion, with a potential payout of roughly $1 trillion if he hits a series of performance milestones over the next decade, including growing Tesla's market capitalization to $8.5 trillion.
When that package is factored in, average S&P 500 CEO pay reached $340.1 million last year – more than 14 times the combined compensation of every other S&P 500 chief executive, based on the AFL-CIO's calculations.
Musk's deal has also made him the world's first trillionaire, an achievement built in large part on his stake in SpaceX, the satellite and artificial-intelligence company he also runs.
Fred Redmond, the AFL-CIO's secretary-treasurer, told Reuters that Musk's pay "changes the dynamic when other CEO compensation plans come up." Boards, he said, are increasingly treating the Tesla deal as a benchmark when negotiating their own executives' terms.
That dynamic helps explain why 2025 produced not just a record average for CEO pay, but a proliferation of one-off "special" awards that sit outside standard annual pay programs – a category compensation consultant Semler Brossy has flagged as an emerging "hot-button issue" in shareholder voting.
For financial advisors managing client portfolios with meaningful exposure to large-cap equities. Rising CEO pay, particularly the arrival of trillion-dollar-style incentive structures, is increasingly a governance factor that institutional investors and proxy advisors weigh when casting "say on pay" votes – votes that can signal board discipline, or the lack of it, on capital allocation.
The AFL-CIO's data shows the average ratio of CEO pay to worker pay across the S&P 500 rose to 312-to-1 last year, up from 285-to-1 in 2024, when Musk's Tesla compensation is excluded. Including it, the average ratio balloons to 5,387-to-1.
Redmond attributed part of the widening gap to stagnant wage growth, which he linked to the spread of artificial intelligence in the workplace and to a Republican-controlled National Labor Relations Board that labor leaders view as less receptive to union organizing.
By contrast, median annual wages for all U.S. workers stood at $69,770 as of May 2025, up 3 percent from a year earlier, according to the U.S. Bureau of Labor Statistics. A separate analysis by Oxfam found that U.S. CEO pay grew roughly 20 times faster than worker wages in 2025.
Not all investors throw their support behind executive pay packages. Semler Brossy found average support for advisory "say on pay" votes at S&P 500 companies stood at 90.6 percent through late June, up modestly from 89.4 percent for all of 2025.
Among the highlights from last year, Goldman Sachs paid chief executive David Solomon $118.9 million, including a large retention award. Only 71 percent of shares cast supported the pay in an advisory vote – below the S&P 500 average. A Goldman Sachs spokesman said the firm was pleased with the "strong supermajority" the vote received.
An even sharper rebuke landed at Welltower, the real estate investment trust, where shareholders approved a pay package for chief executive Shankh Mitra valued at $821 million and intended to cover most of his compensation for the coming decade. Only 19 percent of shares cast backed the award. A company spokesperson said Welltower's board remains committed to engaging with shareholders on their concerns.
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