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Introduction
This 31st annual Institute for Policy Studies Executive Excess report takes an in-depth look at the 100 S&P 500 corporations with the lowest median worker pay, a group we have dubbed the “Low-Wage 100.” For each of these companies, we analyze CEO and worker pay trends since 2019. We also compare, for the past six years, what these companies have spent on stock buybacks to pump up short-term share prices with what they have invested in long-term capital improvements.
The report’s overall finding: At a time when many American workers are struggling with high costs for groceries and housing, the nation’s largest low-wage employers are fixated on making their overpaid CEOs even richer.
Our analysis ends with realizable policy solutions for pushing Corporate America in a more equitable direction.
For detailed analysis , including our methodology, see the full PDF below. A summary follows.
Key findings CEO pay at Low-Wage 100 firms has soared since 2019 while median worker pay has lagged behind U.S. inflation. Between 2019 and 2024, average CEO compensation within this group rose 34.7 percent in nominal — unadjusted for inflation — terms, more than double the 16.3 percent increase in these firms’ average median worker pay. The U.S. inflation rate over this same period: 22.6 percent.
Average CEO compensation within the Low-Wage 100 hit $17.2 million in 2024. The group’s average median worker pay sat at just $35,570.
The average CEO-worker pay ratio of Low-Wage 100 firms has widened by 12.9 percent, from 560 to 1 in 2019 to 632 to 1 in 2024.
The nominal value of median pay actually fell at 22 Low-Wage 100 corporations during this period.
The Starbucks pay gap hit 6,666 to 1 last year , the Low-Wage 100’s widest spread by far. In 2024, the Starbucks CEO pocketed $95.8 million. Over the past six years, amid worker discontent fueling union-organizing drives at hundreds of Starbucks stores, the firm’s median pay rose just 4.2 percent in real terms to $14,674. Only seven S&P 500 firms have lower median pay.
, the Low-Wage 100’s widest spread by far. In 2024, the Starbucks CEO pocketed $95.8 million. Over the past six years, amid worker discontent fueling union-organizing drives at hundreds of Starbucks stores, the firm’s median pay rose just 4.2 percent in real terms to $14,674. Only seven S&P 500 firms have lower median pay. Ulta Beauty reported the Low-Wage 100’s steepest drop in median pay. Between 2019 and 2024, a period when the cosmetic retailer significantly expanded the part-time worker share of its workforce, the company’s real median pay plunged by 46 percent to $11,078. From 2019 through 2024, the Low-Wage 100 spent $644 billion on stock buybacks. Over the past six years, all but three Low-Wage 100 firms spent corporate dollars on stock buybacks . By repurchasing their own shares, companies artificially inflate executive stock-based pay and siphon resources out of worker wages and productive long-term investments.
. By repurchasing their own shares, companies artificially inflate executive stock-based pay and siphon resources out of worker wages and productive long-term investments. Lowe’s ranks as the Low-Wage 100’s buyback leader. The company spent $46.6 billion on share repurchases from 2019 through 2024 . Over that span, this sum could have funded an annual $28,456 bonus for each of the firm’s 273,000 employees — or added 88 employees to each of the firm’s retail outlets. In 2024, Lowe’s CEO Marvin Ellison enjoyed a total compensation of $20.2 million — 659 times more than the retailer’s $30,606 median annual worker pay .
. Over that span, this sum could have funded an annual $28,456 bonus for each of the firm’s 273,000 employees — or added 88 employees to each of the firm’s retail outlets. . Home Depot currently sits second in the Low-Wage 100 buyback rankings. The big-box chain spent $37.9 billion on share repurchases between 2019 and 2024. That outlay would have been enough to give each of Home Depot’s 470,100 global employees six annual $13,423 bonuses. The Home Depot median pay: just $35,196. From 2019 through 2024, a majority of Low-Wage 100 firms spent more on stock buybacks than on long-term capital expenditures. Over the past six years, 56 Low-Wage 100 companies plowed more corporate cash into buying back their own shares of stock than investing in capital improvements .
. If we exclude capital expenditure outlier Amazon from the calculation, the Low-Wage 100 as a whole spent more on buybacks than on “CapEx” during this period. At least 32 billionaires owe their wealth to Low-Wage 100 companies. Five of these firms have spawned multiple billionaires still living today: Walmart (eight), Estee Lauder (four), DoorDash (three), Public Storage (two), and Tyson Foods (two). Policy changes can prevent wasteful stock buybacks and excessive CEO payouts. Taxing extreme CEO-worker pay gaps: In one recent survey, 80 percent of likely voters expressed support for a tax hike on corporations that pay their CEO over 50 or more times what they pay their median employees.
In one recent survey, 80 percent of likely voters expressed support for a tax hike on corporations that pay their CEO over 50 or more times what they pay their median employees. Increasing the buybacks tax: If Congress in 2022 had set our current 1 percent excise tax on stock buybacks at 4 percent, the Low-Wage 100 would have owed approximately $6.3 billion in additional federal taxes on share repurchases in 2023 and 2024.
If Congress in 2022 had set our current 1 percent excise tax on stock buybacks at 4 percent, the Low-Wage 100 would have owed approximately $6.3 billion in additional federal taxes on share repurchases in 2023 and 2024. Restricting buybacks and CEO pay through federal contracts and subsidies: The Biden administration made modest progress on this front through the CHIPS semiconductor subsidy program. But the federal government could be doing much more to leverage the power of the public purse against wasteful stock buybacks and excessive CEO pay.
Recommendations
We highlight three particularly promising areas for CEO pay policy reform.
Subjecting corporations with excessive levels of CEO pay to higher tax levies.
Higher tax rates on companies with wide CEO-worker pay gaps would create an incentive to both rein in executive pay and raise worker wages, all the while generating significant new capital for vital public investments. Laws that share those goals are already generating revenue in two major cities, San Francisco and Portland, Oregon.
Members of the U.S. Congress have also introduced several related bills, including:
The Curtailing Executive Overcompensation (CEO) Act: This bill applies an excise tax to publicly traded and private companies with CEO-to-median-worker pay disparities that run over 50 to 1. Under this excise tax formula, the tax owed would be proportional to the degree a company’s pay ratio exceeds 50 to 1 and to the level of the CEO’s compensation. In other words, companies with large pay gaps would owe extra taxes — and those companies with extremely high CEO pay would owe Uncle Sam even more.
Revenue estimate: This bill, had it been in effect in 2022, would have raised over $10 billion in annual revenue from the Fortune 100 largest U.S. companies alone.
The Tax Excessive CEO Pay Act: This legislation ties a company’s federal corporate tax rate to the size of the gap between its CEO and median worker pay. Tax penalties would begin at 0.5 percentage points for companies that pay their top executives between 50 and 100 times more than their median workers. The highest penalty would apply to companies that pay top executives over 500 times worker pay.
Revenue estimate: $150 billion over 10 years. The CEO Accountability and Responsibility Act imposes similar tax penalties for large ratios and ties the pay ratio to government contracting.
A May 2024 survey suggests that such taxes would be enormously popular. Overall, 80 percent of likely voters favor a tax hike on corporations that pay their CEOs over 50 or more times more than what they pay their median employees.
Taxing and restricting stock buybacks.
A 1 percent federal excise tax on the repurchase of corporate stock went into effect in 2023. With nearly $209 billion in combined stock buybacks for 2023 and 2024, the Low-Wage 100 owed approximately $2.1 billion in federal taxes over those two years.
A Senate bill, the Stock Buyback Accountability Act, would quadruple this excise tax. If that 4 percent tax had been in place in 2023 and 2024, the Low-Wage 100 would have owed approximately $6.3 billion in additional federal taxes on their share repurchases, assuming no change in their buyback behavior. That increase would be enough to cover the cost of 327,218 public housing units each year for two years.
Another Senate bill, the ALIGN Act, would ban executives from selling their shares within a year of a stock buyback announcement. This would prevent CEOs from timing share repurchases to cash in personally on a short-term price pop they themselves have artificially created.
Using federal contracts and subsidies to discourage wide corporate pay gaps.
The Biden administration took several steps to use the power of the public purse to discourage CEO pay-inflating stock buybacks. During the Biden White House years, the Department of Commerce gave preferential treatment in the awarding of $39 billion in CHIPS subsidies for domestic semiconductor production to firms that committed to refraining from all stock buybacks for five years.
Future administrations could do much more to leverage the power of the public purse against extreme pay disparities. The Patriotic Corporations Act could serve as a model. This bill would grant preferential treatment in federal contracting to firms with CEO-worker pay ratios of 100 to 1 or less, among other benchmarks. The Congressional Progressive Caucus has supported such incentives.
By encouraging major corporations to narrow their pay gaps, a president can also help ensure that taxpayers get the biggest bang for federal contract bucks. Studies have shown that companies with narrow gaps in CEO-worker compensation tend to perform at higher levels than firms with wide gaps.
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