CEO pay skyrockets in 2025 amid growing income inequality in the US
econews. The pay gap between executives and their employees has widened from 2024 to 2025, with chief executives making 312 times what their median worker earned, according to the AFL-CIO, the largest coalition of labour unions in the United States.
That’s up from the previous rate of 285 times the median worker salary for executives working in the companies listed on the S&P 500 index.
The figures were released on Thursday as part of the AFL-CIO’s annual Paywatch report, which tracks the growing gulf in wages.
The labour federation warned that the divide in pay risks having broader effects for the global marketplace. If CEOs are focused on increasing their paycheques, the AFL-CIO warned that they may be less concerned about the stability of their companies — or of the economy overall.
“Excessive CEO compensation contributes to growing economic inequality,” the AFL-CIO wrote. “It creates the risk that CEOs will make short-term decisions to maximize their pay, even if it hurts the company’s long-term health.”
In determining the executive-to-worker pay ratio, the AFL-CIO explained it had to exclude one outlier: the world’s richest man, Elon Musk.
In 2025, Musk made $158bn as CEO of the electric vehicle company Tesla — 2.5 million times more than the company’s average employee. His salary even dwarfed the company’s revenue for the year, which was $94bn.
That same year, the carmaker reported a 3 percent decline in revenue. Sales dropped by roughly 9 percent, as some consumers boycotted the company over Musk’s participation in President Donald Trump’s second administration.
Tesla also faced 11 vehicle recalls last year, accounting for 745,000 of its cars.
For the first half of 2025, Musk served as the head of the Department of Government Efficiency (DOGE), an office Trump established to oversee cuts to the federal workforce and spending.
