CEOs with lowest-paid US workers ‘focused on own short-term windfall’ – report

The CEOs of some of the largest employers with the lowest-paid workers in the US are more “focused on their own personal short-term windfall” – spending significantly more money on stock buybacks than capital investments and contributions to employee retirement plans, according to a new report released by the Institute for Policy Studies.
Between 2019 to 2023, the 100 largest low-wage employers in the US, the 100 corporations in the S&P 500 with the lowest median worker pay, spent $522bn on stock buybacks. Lowe’s and Home Depot spent the most on stock buybacks, with Lowe’s spending $42.6bn during this period and Home Depot spending $37.2bn.
The report cites that Lowe’s could have used those funds to give every one of its 285,000 employees an annual $29,865 bonus for five years, and Home Depot could have used those funds to give five annual $16,071 bonuses to each of the retailer’s 463,100 employees.
“The data in this report reveals how CEOs are focused on their own personal short-term windfall, rather than a long-term prosperity for their workers or even for their own companies,” said Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies and author of the report. “They’ve blown over half a trillion dollars, these 100 companies, on really what amounts to a financial scam to inflate CEO pay while many of their workers were struggling to put food on the table.”
Forty-seven of the 100 largest low-wage employers in the US spent more on stock buybacks from 2019 to 2023 than on capital improvements, including major tech firms such as Johnson Controls, which outspent on stock buybacks compared to capital improvements by $8.8bn and Analog Devices spending $6.2bn more.
Twenty of the largest low-wage employers spent nine times as much on stock buybacks over the last five years than on employee retirement plan contributions; AutoZone and Chipotle topped the gap among employers, with AutoZone spending 92 times more on stock buybacks than on employee retirement contributions and Chipotle spending 48 times more on stock buybacks than 401k contributions to employees.
The report noted legislation in Congress that has been proposed to ban stock buybacks on the open market, returning to pre-1982 levels when the securities and exchange commission (SEC) passed a rule to permit stock buybacks, to impose limitations on CEOs selling their stocks after stock buybacks, and to impose taxes on stock repurchases.
A new SEC rule proposed in 2023 to expand transparency around stock buybacks was struck down after the US Chamber of Commerce sued to block it. The report also cited legislation proposed to increase taxes on corporations and excessive CEO compensation, and efforts by the Biden administration to leverage federal contracts and subsidies to rein in wide corporate pay gaps between CEOs and workers.
“Even if companies brag about offering matching or match up to a certain share of employee contributions to their retirement plans, this is meaningless for workers who are earning so little that they can’t afford to set anything aside for their retirement,” explained Anderson. About 92% of Chipotle workers eligible to participate in the company’s 401k plan have a zero balance, she noted.
“We should be thinking about our long-term economic future, the future of workers, and whether they’re going to be able to live a dignified retirement. We should be thinking about the long-term competitiveness of our corporations, and instead, too many CEOs are really just thinking about their own short-term personal windfall.”
The CEO pay to median worker pay gap decreased from 603 to 1 in 2022 to 538 to 1 in 2023 due to a slight decrease in CEO pay and 9% increase of median worker pay among the top 100 low-wage employers from $31,672 in 2022 to $34,522 in 2023, unadjusted for inflation.
The retailer Ross Stores topped the list in CEO to median worker pay gap, with the CEO Barbara Rentler receiving compensation of $18.1m in 2023, 2,100 times more than the median pay of $8,618 for the median annual employee compensation at Ross Stores, a part-time retail associate. Nike CEO John Donahoe II received the highest CEO compensation among CEOs in the report, with $32.8m total compensation in 2023, 975 times the median employee pay at Nike.
CEO pay has soared in recent decades compared to typical workers’ pay. From 1978 to 2022, CEO pay increased by 1,209.2% compared to just a 15.3% increase in median worker compensation, according to a 2023 report by the Economic Policy Institute.
“We should see the narrowing of the gap between CEO and worker pay at these low-wage companies as a reflection of the struggles that low-wage workers have taken on in recent years,” concluded Anderson, citing victories for minimum wage increases and successful organizing efforts. “At the very bottom of our country’s wage scale, we have seen some improvement. Most of those workers still haven’t been able to get their heads much above the inflation level, but it’s at least more positive than we have seen in some past years.”