Dennis Muilenburg left Boeing in January 2020 with about $62 million in stock and pension benefits, after presiding over the decisions that led to 346 deaths. The company was charged. No executive was. No clawback. Perfectly legal.
In 1965 the average chief executive of a top-350 American company took home about $1.1 million in today's dollars. Muilenburg's exit package alone was more than fifty times that — not because Boeing had become fifty times more valuable to run, but because the rules on how executives are paid had changed. The Constitution protects property against the government. It says nothing about a board that, with every disclosure filed and every vote taken, directs the surplus of an enterprise to the people who run it. The numbers on this page document what has happened in that silence.
All five figures are the Economic Policy Institute's realized-compensation measure for the 350 largest U.S. firms by sales, from its September 2026 release. The realized measure counts stock options when exercised and stock awards when vested — what the CEO actually took home. On EPI's alternative "granted" measure, which values options and awards on the day they are given, the 2025 ratio is 247:1. On the granted measure the 1965 figure is 15:1 and the 1978 figure 25:1; on the realized measure, 21:1 and 31:1. The full annual series, both measures, is on the home page chart.
The problem is not one overpaid CEO. The institutions meant to check executive pay — the board, its compensation committee, the consultant it hires, the shareholder vote it schedules — are each chosen or shaped by the people whose pay they check. The Corporate Pay Accountability Act therefore covers the executives, the directors, and the pool of senior pay together, and measures each against the same equilibrium.
Every ratio rule has been gamed before. The CPAA is designed around a single principle that defeats all of them: economic reality controls, not legal form. If value flows from the corporation to a covered person by any means, it counts toward the ratio. If a worker's labor primarily benefits the corporation, that worker counts in the workforce.
Vector 01
Contractor laundering
Outsource janitors, food service, security to third parties. They disappear from the workforce count. Your median worker is now an engineer. The ratio looks compliant. The pay at the top is untouched.
The fix
Primary-beneficiary rule: any worker whose labor primarily benefits the corporation counts, regardless of who signs the paycheck. Contracted workers are counted by the hours they work at the corporation's direction, on its premises, or on its systems — not by the share of the contractor's revenue the corporation supplies, which a contractor with many clients can dilute below any threshold. A janitorial firm with ten clients still contributes the hours its crews work for this one.
Vector 02
Title restructuring
The CEO's ratio is measured. So you call the operational leader "President" or "Executive Chairman" and redistribute $50 million across five C-suite titles instead of one. Each individual looks compliant. The total is unchanged.
The fix
Covered executives are defined by authority, not title: every executive officer as the securities laws already define the term — the president, anyone in charge of a principal business unit, division, or function, and anyone who performs a policy-making function; everyone with authority over compensation, capital allocation, or the hiring of senior staff; and every director. Anyone paid more than 10:1 of the company's own median worker is presumed to be a covered executive, and the presumption can be rebutted only by a certification — under the same audit liability as the ratio itself — that the person holds none of those authorities. A research scientist or a salesperson paid for results is not swept in. A chief executive retitled "chief scientist" is.
Vector 03
The consulting LLC
The executive takes a nominal salary of $500,000. Actual compensation flows through a personal LLC with a $10 million "strategic advisory contract" with the corporation.
The fix
Any payment to any entity in which a covered executive or board member holds a direct or indirect economic interest above 5% counts toward their individual ratio. Full stop.
Vector 04
Deferred departure bonus
The executive serves three years at a compliant ratio. On departure she receives a $50 million "separation package" or "non-compete payment." None of it appeared in the annual ratio.
The fix
All deferred compensation, separation payments, and non-compete arrangements are amortized back into the annual ratio over the period to which they relate, or attributed entirely to the final year of service — whichever produces the higher ratio. The same rule applies on the
CPAA page.
Vector 05
Subsidiary separation
Create a thin holding company at the top where the CEO sits, surrounded by well-paid executives. Park all low-wage workers in subsidiaries that are technically separate employers.
The fix
Any entity in which the covered corporation holds more than 50% economic interest contributes its workers to the covered workforce. Three-year lookback on restructurings designed to evade compliance.
Vector 06
Related-party pricing
The corporation buys a building from the CEO's family trust at above-market value. It makes below-market loans to the CFO's fund. It hires the board chairman's son's firm at three times the market rate.
The fix
All related-party transactions involving covered executives or board members are valued at arm's length. The above-market premium counts as compensation toward the individual ratio.
Vector 07
Board perquisite laundering
Board members take minimal cash fees that look compliant with the board ratio — and receive large equity grants. In any one year the realized value looks modest. Over a tenure they receive millions.
The fix
Board compensation is calculated on a rolling three-year average of total realized value — cash, equity, perquisites, and all related-party benefits — so single-year optics cannot obscure the cumulative total.
Vector 08
Aggregate pool inflation
Individual ratios are measured, so you inflate the C-suite from 5 officers to 25. Total senior pay is higher than before. Each individual looks compliant.
The fix
The pool has two parts. The bounded pool is every covered executive as defined in Vector 02, plus every director, counted together — so total pay at the top is limited regardless of how many titles are invented. The disclosed pool is everyone else paid more than 5:1 of the median worker: reported, not capped, so a firm that pays its engineers well is not treated as if it had inflated its C-suite.
Vector 09
Spinoff arbitrage
Spin off a division. The spinoff's median worker is engineered to be higher-paid. The CEO of each entity is paid a compliant multiple of a favorable base. Two favorable ratios where there was one.
The fix
For three years after a spinoff, the ratios of both entities are calculated against the combined pre-spinoff workforce median. Spinoffs designed primarily for ratio evasion are void for CPAA purposes.
Vector 10
Geographic arbitrage
Move all low-wage operations offshore. The domestic covered workforce is now predominantly high-paid knowledge workers. The median shoots up. The ratio is calculated against a much higher base.
The fix
For corporations above a global revenue threshold the covered workforce includes all workers worldwide, with the domestic workforce weighted at no less than 60% of the covered workforce for ratio purposes.
Vector 11
The shrinking denominator
Cut the lowest-paid positions and the median jumps. Take a company of 1,000 workers, 600 at $40,000 and 400 at $100,000; remove 250 of the lower-paid jobs and the median goes from $40,000 to $100,000, and a $4 million chief executive goes from 100:1 to 40:1 — without one remaining worker getting a raise.
The fix
For three years after a reduction of more than 10 percent in covered full-time-equivalent hours in any year, or more than 15 percent over any three years, the ratio is computed against the pre-reduction median — the rule Vector 09 already applies to spinoffs. The Act's floor under the denominator (the national median for a full-time worker, about $65,000; see the
CPAA page) changes the arithmetic but not the lesson: the same firm starts at 62:1 rather than 100:1, and the cut still takes it to 40:1, which is why the lookback is needed as well. The firm also reports the 10th, 25th, and 50th percentiles of covered pay and total covered headcount every year, so a ratio that improves by subtraction is visible as what it is. A firm that becomes a smaller, higher-skilled firm is not punished for it; it is measured against who it was for three years, and against who it is after that.
Vector 12
The exit
Go private. A buyout takes the company out of the securities laws altogether, and so out of the ladder — and a private-equity owner answers to no workforce and no public. For a firm with the resources, leaving is cheaper than rebuilding.
The fix
A company that goes private within five years of first exceeding 50:1 carries the ladder's disclosure and clawback obligations with it for ten years, filed annually with the SEC; a company that delists to an over-the-counter market while remaining a reporting company stays on the ladder. Private companies in general are untouched by this Act. Going private sheds the owners' vote and the board remedies, but not the disclosure and not the clawback.