Average pay for chief executives at S&P 500 companies climbed to a record $22.8 million in 2025, a 21% jump from the year before, according to new data released Thursday by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). The figure marks the highest average CEO compensation the labor federation has recorded since it began tracking the data in the 1990s — and notably, it excludes Tesla and SpaceX CEO Elon Musk entirely.

Musk's Pay Deal Is Reshaping the Boardroom

Behind the surge is a wave of "mega-pay" packages that corporate boards are increasingly modeling on Musk's extraordinary compensation deal at Tesla, according to labor officials who compiled the report. Tesla shareholders approved a restricted stock plan last November that the company valued at $158 billion, with a potential total payout of roughly $1 trillion if Musk hits a series of ambitious performance targets. Fred Redmond, the AFL-CIO's secretary-treasurer, told Reuters that Musk's pay "changes the dynamic when other CEO compensation plans come up," adding that boards increasingly "use it as a reference" point when negotiating packages for their own executives.

The Numbers With Musk Included

When Musk's package is factored into the calculation, average S&P 500 CEO pay reached a staggering $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 substantially on his stake in SpaceX, the satellite and artificial-intelligence company he also runs. His net worth stood at an estimated $870.6 billion as of Thursday morning — more than double that of the world's second- and third-richest people, Google co-founder Larry Page ($284.3 billion) and Amazon's Jeff Bezos ($275.7 billion) — after peaking at an all-time high of $1.45 trillion before a decline in SpaceX shares cut his fortune roughly in half.

The Widening Pay Gap With Workers

The report also tracked how executive pay compares to typical worker wages. The ratio of CEO-to-worker pay at S&P 500 companies rose to 312-to-1 last year, up from 285-to-1 in 2024, when excluding Musk's Tesla compensation entirely. Including his pay, that ratio balloons to 5,387-to-1. By comparison, mean annual wages for all US workers stood at $69,770 as of May 2025, up just 3% from the year before, according to Labor Department data.

Other Notable Pay Packages

Among S&P 500 companies disclosing special pay awards this year, Goldman Sachs paid CEO David Solomon $118.9 million, including a major retention award; the pay won backing from 71% of shares cast in an advisory vote, below the average level of shareholder support. A Goldman Sachs spokesman said the firm was "very pleased with the strong supermajority this vote received." Real estate investment trust Welltower paid CEO Shankh Mitra $821 million, structured to cover most of his compensation over the coming decade — a package that received support from only 19% of shares cast, highlighting the governance friction such outsized awards can generate. A Welltower spokesperson said the board "remains committed to engaging with shareholders to gather their feedback and understand their perspectives."

How Boards Are Defending the Trend

Boardroom compensation committees generally argue that their pay plans are tied to shareholder value and designed to incentivize executives to deliver results, pointing to continued support from major investors, including large asset managers, at corporate annual meetings. According to compensation consulting firm Semler Brossy, average support for advisory "say on pay" votes at S&P 500 companies stood at 90.6% through late June, up slightly from 89.4% for all of 2025 — suggesting that despite rising pay figures and some high-profile dissents, most shareholders continue to back executive compensation plans overall.

Labor's Response

Union leaders voiced sharp criticism of the widening gap, pointing out that ordinary workers' wages have remained comparatively stagnant even as executive pay accelerates, with some labor advocates linking the disparity to broader economic shifts including AI adoption and current labor policy. The AFL-CIO's annual "Executive Paywatch" study remains one of the most closely watched trackers of CEO compensation trends in the country, and this year's edition frames Musk's pay deal as a structural turning point — not just an outlier, but a new reference point actively shaping how the country's largest companies design pay for their top executives. For the full AFL-CIO Paywatch report, see AFL-CIO's Executive Paywatch.

With more boards reportedly looking to Musk's Tesla deal as a template, this year's record-setting CEO pay figures may prove to be just the starting point for an even wider gap between executive compensation and typical worker wages in the years ahead.