US executive pay rises at fastest rate in 14 years

US bosses’ pay is increasing at the fastest rate for at least 14 years, according to new figures which critics say illustrate how ballooning reward packages such as Elon Musk’s risk exacerbating social inequality.

So far in 2024, median chief executive pay at S&P 500 companies has risen by 12 per cent, according to ISS Corporate, part of proxy adviser Institutional Shareholder Services. That compares with a 4.1 per cent year-on-year increase in US wage growth, according to official figures.

Musk this week secured an emphatic victory in a shareholder vote on his $56bn package of stock options — the largest in US history.

Musk’s win — the vote ratified a pay package first made in 2018 — sends executives a message that “the sky’s the limit here . . . you can earn as much as you want to”, according to William George, a former compensation committee chair on Exxon’s board and former chief executive of Medtronic.

Executive pay “has gotten out of control”, George said. “This is going to cause a further split in our country between the haves and the have nots. This is a grave concern to me because I think there will be a loss of trust [in companies].”