The report also highlights that as CEO pay increases, so does that of the very top workers, which the study said is another contributor to growing income inequality.
"CEOs of large firms are setting the pattern for this very large group of people at the very top, and growth of CEO compensation has helped drive up the pay of the top 1% and 0.1% of all workers," Mishel said.
The inflation-adjusted pay of the top 0.1% grew 339.2% from 1978 to 2017, according to findings in the report.
The Star Tribune has measured CEO pay at Minnesota public companies for 28 years, including the value of exercised stock options. The 20 largest Minnesota-based public companies are comparable in size to the 350 largest public companies in the EPI study.
The median compensation of the 20 highest-compensated Minnesota CEOs in 2018 was $13.9 million, down 17% from the year before but up 149% in the past 10 years when the median compensation of the top 20 Minnesota CEOs was $5.6 million.
The EPI study noted that CEO total compensation when including exercised stock options fluctuates along with the stock market since CEOs are more likely to exercise options under more advantageous market conditions.
Authors of the EPI study noted that CEO pay has outpaced the growth of the stock market and even the pay of other high-wage earners. "This is yet another indicator that CEO pay is more likely based on CEOs' power to set their own pay, not on a market for talent," they said in the report.
The EPI solutions to fix the problems of high CEO pay and income inequality include policies that would reinstate higher marginal income tax rates, higher corporate tax rates for companies with higher CEO-to-worker compensation ratios or luxury taxes on amounts higher than a set cap.
"The economy would suffer no harm if CEOs were paid less (or taxed more)," the study concluded.
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