Average CEO Pay Climbs to $22.8 Million Amid Rise of Mega Compensation Awards

Average compensation for CEOs at S&P 500 companies climbed 21% to a record $22.8 million in 2025, excluding Elon Musk’s Tesla compensation, according to a new analysis by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). The increase marks the highest average CEO pay recorded by the labour federation since it began tracking the figure in the 1990s.

The rise has been driven in part by the growing use of mega compensation plans, with corporate boards increasingly offering executives exceptionally large performance-linked awards. The trend has been influenced by Elon Musk’s controversial Tesla compensation structure, which was valued by Tesla at $158 billion and could be worth substantially more if all performance targets are achieved.

When Musk’s Tesla compensation is included, average CEO pay across the S&P 500 jumps to $340.1 million for 2025. The figure highlights how a small number of extraordinary compensation packages can significantly influence averages across the index.

The increase in executive compensation has also widened the gap between CEOs and workers. Excluding Musk, the average CEO-to-worker pay ratio across S&P 500 companies increased from 285:1 in 2024 to 312:1 in 2025. Including Musk’s compensation, the ratio rises to 5,387:1.

Several major compensation awards illustrate the growing scale of executive packages. Goldman Sachs CEO David Solomon received a package worth $118.9 million, while Welltower CEO Shankh Mitra received an award worth more than $800 million, with the majority linked to long-term performance and stock-based incentives.

Despite increasing scrutiny, shareholders continue to approve most conventional CEO compensation proposals. However, support tends to be weaker for special or unusually large awards, reflecting concerns around governance, shareholder dilution and whether executive rewards remain appropriately linked to long-term company performance.

The findings highlight a broader shift in executive compensation, where companies are increasingly using large equity-based and performance-linked awards to attract, retain and incentivise top leadership. At the same time, the growing disparity between executive and employee earnings continues to fuel debate around corporate governance, wage growth and income inequality.