Kathmandu— Executive compensation in the United States reached unprecedented levels in 2025, as the gap between CEO pay and worker earnings continued to widen, according to an annual report released Thursday by the AFL-CIO. The study found that chief executives of S&P 500 companies earned 312 times what their median workers made – up from 285 times in 2024. This surge in executive pay occurred despite revenue and sales declines for some major corporations, raising concerns about economic inequality and the prioritization of short-term gains over long-term stability.

Extreme Pay Disparities Revealed

The AFL-CIO’s annual Paywatch report highlighted particularly stark examples of income inequality. Elon Musk, CEO of Tesla, earned $158 billion in 2025 – a staggering 2.5 million times more than the company's average employee. This figure even exceeded Tesla’s total revenue for the year, which was $94 billion, despite a 3 percent decline in sales and 11 vehicle recalls. Excluding Musk, the average CEO pay still increased by 21 percent to $22.8 million, nearly double the compensation packages from a decade ago.

Industry Variations in Executive Compensation

The report revealed significant variations in executive-to-worker pay ratios across different industries. The manufacturing sector exhibited the largest disparity, with CEOs earning an average of $696 million while workers earned just over $93,000 – a more than 11,000 percent difference. Tesla was identified as a major driver of this high ratio. The arts, entertainment and recreation industry followed closely behind, with a pay ratio of 1,057 to one. Starbucks exemplified the issue, where the CEO earned over $30 million while the average worker made only $17,279 – just above the federal poverty line.

Social Assistance Reliance and Economic Concerns

The AFL-CIO report also found that workers at major corporations like Amazon, Dollar Tree, FedEx, McDonald’s, and Walmart are disproportionately reliant on social assistance programs. For example, Amazon CEO Andy Jassy earned 51 times more than the company's average employee, while McDonald’s CEO Chris Kempczinski made 1,082 times more than the average worker at the fast-food chain. These findings come amid growing economic concerns, including a recent downturn in consumer sentiment and job losses, with the US economy shedding 23,000 jobs in July.

Trump’s Income Surge

The report also examined former President Donald Trump's income during his second term. It found that Trump’s earnings surged by 254 percent in 2025, reaching $2.2 billion, largely driven by revenue from World Liberty Financial, the Trump family’s cryptocurrency venture, and meme coin sales. This income is approximately 43,154 times what the median US worker earned last year, a figure that stands in contrast to the fact that roughly 37 percent of US adults struggle to cover a $400 emergency expense.

The AFL-CIO report underscores growing concerns about economic inequality and its potential impact on long-term economic stability, prompting calls for policies aimed at addressing the widening gap between executive and worker compensation.

(With inputs from Al Jazeera)

Originally published on abcnews.com.np.