Two ratios often cited to support the argument that CEO pay is too high are:
1. the growth rate of CEO pay compared with the growth rate of the stock market; and
2. the ratio of CEO pay to average worker pay.
As discussed in this column, these two ratios do not necessarily support the argument that CEO pay is too high. Also, the ratios do not explain underlying factors that cause pay levels to be where they are. Such factors include the competition of major US corporations for a very limited supply of top CEO talent. A recent Rock Center/Stanford Business School report on this subject is noted at the end of today’s column.
Rate of Increase of CEO Pay Compared with Rate of Increase in the Stock Market 
On July 20, 2017 the Economic Policy Institute published a report entitled “CEO pay remains high relative to the pay of typical workers and high-wage earners” (the “2017 EPI Report”). It was authored by Lawrence Mishel and Jessica Schieder.
The 2017 EPI Report goes back to 1965. For the period 1965–2015 (approximately 50 years) the cumulative annual growth rate (CAGR) for CEO pay was greater than the CAGR for the stock market. On the other hand, if one looks at the CAGR in more recent periods (such as from 1995 to 2015), the CAGR for CEO pay has been lower than the CAGR for the stock market. Following is a chart based on the 2017 EPI Report, showing CAGRs for CEO pay at the Top 350 Companies (i.e., the top 350 U.S. companies based on revenues) and the S&P 500 Index for the period 1965–2015 and for the period 1995–2015 (the latter being shown at five-year intervals).