As decades-high inflation rates put intense pressure on American households, many companies failed to give raises to their workers last year to keep pace, according to a new report.
But thanks to stock buybacks and other incentives, executives at many of those same companies fared much better, per the report released Tuesday by the Institute for Policy Studies, a left-leaning think tank in Washington, D.C.
CEO pay last year at the 300 firms analyzed by the study increased $2.5 million, or 31%, to an average of $10.6 million. But at 106 of those firms, median worker pay failed to keep up with last year’s average inflation of 4.7%. And at 69 of those companies, employee pay actually declined.
“It’s the basic matter of fairness,” Sarah Anderson, lead author of the report and director of the IPS Global Economy Project, told Fortune. “You have workers, many of whom have performed heroically [in recent years] to keep our economy going, and yet their efforts aren’t valued more than just a tiny fraction of the value that’s placed on the efforts of people at the top of the corporation.”
Still, of the 300 companies, 67 spent more than $43 billion on stock buybacks, a common maneuver that inflates executive stock-based pay.
At Lowe’s, for example, the retailer spent $13 billion on share repurchases and stock buybacks last year, while median worker pay at the company fell 7.6% to just under $23,000. According to the IPS, Lowe’s could have instead distributed that $13 billion to its 325,000 employees, giving them a $40,000 raise each.
Best Buy similarly spent $3.5 billion on buybacks in 2021, or enough to give all 105,320 employees a $32,270 raise. Median pay at Best Buy dropped 1.8% to $29,999 last year.
“There is a real tradeoff when companies are putting so much of their resources into stock buybacks that inflate their CEO pay,” Anderson said. “Every dollar spent that way is a dollar that’s not spent on things that might help lower employee turnover rate, or raise workers’ pay and better position them to be competitive in the future.”
Neither Best Buy nor Lowe’s immediately responded to Fortune’s request for comment.
The widening gap between CEO and worker salary has gotten so extreme that some have called for President Biden or Congress to enact a “maximum wage” for top executives. And at some companies, including Amazon, low wages have contributed to workers at factories and stores across the country voting to unionize.
“It’s in people’s self-interest to try to contain this,” Rosanna Landis Weaver, wage justice and executive pay program senior manager at As You Sow, a nonprofit shareholder-advocacy group, told Fortune in May. “The political instability created by income inequality is a real danger. It’s a danger to democracy, and it’s a danger to capitalism.”
The average gap between CEO and median worker pay at the companies analyzed grew to 670 to 1, up from 604 to 1 in 2020, according to the IPS report. At 49 of the companies, the pay ratios exceeded 1,000 to 1.
The picture was only slightly better among CEOs of the companies listed on this year’s Fortune 500 list. They earned more than 205 times what their typical employee made in 2021.
At Amazon, CEO Andy Jassy received nearly $213 million in compensation in 2021—6,474 times his median worker’s salary of $32,855, according to a proxy statement filed with the SEC in April.
Discovery CEO David Zaslav’s 2021 compensation was $247 million, nearly 3,000 times the median salary at the company.
Inflation has only increased in 2022, reaching 8.5% year over year in March, the highest rate since 1981. It has forced many Americans to cut back on spending.
