Summary of Key Points
In 2025, the average salary of CEOs of S&P 500 index components reached a record high (excluding Elon Musk, which was $22.8 million, an annual increase of 21%); however, due to failing to meet performance criteria, Musk received nothing in cash. His innovative “highly challenging performance-based” compensation plan is now being emulated by other companies. Meanwhile, the gap between CEO and employee salaries has widened to the highest level in 16 years, with some of these generous compensation packages sparking controversy among shareholders.
I. S&P 500 CEOs’ Salaries Reach New Heights, but Musk’s Compensation Remains Unrealized
The average salary of S&P 500 CEOs in 2025 increased to $22.8 million, a 21% rise from the previous year—yet this figure does not include Musk’s compensation. If Musk’s net worth of $158.4 billion is taken into account, the average salary would soar to $340 million. But don’t be fooled: Musk hasn’t received that amount in cash.
Why? Because Tesla’s compensation is tied to performance targets such as market value and delivery volumes. Last year, Musk failed to meet these targets, and he also waived a transition bonus worth over $26 billion, resulting in zero actual cash or stock rewards for 2025. In simple terms, the plan was like “drawing a big pie but not getting to eat it.”
II. Other Companies Are Copying Musk’s “Challenging” Compensation Plans
Musk’s compensation structure is unique: it’s not a fixed salary; instead, employees receive stock only if they achieve extremely difficult goals. For example, the new plan approved by Tesla’s shareholders requires increasing the company’s market value from $1.4 trillion to $8.5 trillion within 12 years, while producing 20 million cars and 1 million humanoid robots annually—meeting these targets could earn Musk up to $1 trillion in compensation. SpaceX’s requirements are even more ambitious: a market value of $7.5 trillion plus settling 1 million people on Mars would earn him 200 million shares with super voting rights; building a 100 terawatt data center in space would earn him another 60.4 million shares.
Although these goals sound like something out of a science fiction movie, analysts say other company boards are starting to adopt Musk’s approach. As the AFL-CIO secretary-general stated, “Musk’s plan has changed the game; everyone is using it as a template.”
III. The Gap Between CEOs and Employees Widens to the Highest Level in 16 Years, Triggering Anger
Excluding Musk, the average salary of S&P 500 CEOs in 2025 was 312 times that of their employees (up from 285 times last year), with a median gap of 198 times. For comparison, the average annual salary of a typical American worker in 2025 is only $69,800, an increase of just 3%, while CEOs’ salaries rose by 21%.
Union members are particularly upset, arguing that this inequality is unacceptable and represents the largest gap in 16 years. Imagine working for 312 years to earn what a CEO earns in one year—anyone would find that unfair.
IV. Shareholders’ Views on Executive Compensation
While shareholders of S&P 500 companies generally support executive compensation (with an average approval rate of 90.6%, up from last year), not all high salaries are well-received. For instance, one-time bonuses have sparked controversy:
- Goldman Sachs CEO Solomon received $118.9 million, including a retention bonus, but only 71% of shareholders approved it (well below the average approval rate).
- Welltower’s compensation plan for its CEO, valued at $821 million (mainly in stock), was supported by just 19% of shareholders, and the company is still in discussion with them.
The reason? These bonuses are often additional and disconnected from the regular compensation system, leading shareholders to question their value—after all, the money belongs to the shareholders, and they have the final say on how it’s spent.
Conclusion
This news report highlights two main contradictions: firstly, CEOs’ salaries are increasing significantly, with “Musk-style” performance-based compensation plans becoming more widespread; secondly, the growing gap between CEOs and employees is causing dissatisfaction and shareholder controversy. This reflects the issue of income inequality in the U.S. workplace and the changing trends in corporate compensation systems. It’s clear that CEOs don’t get their money for nothing (they must meet challenging goals), but the gap between them and their employees is indeed widening.