How Do CEOs and Other Executives Really Get Rich?
Written by
Vance Cariaga
Edited by
Zuri Anderson
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Elon Musk has grabbed plenty of headlines this year — and not all because of his role as Tesla CEO.
But that role took center stage in early September when the Tesla board of directors proposed a $1 trillion compensation plan for Musk. If approved, it would be the “largest corporate pay package in history,” according to Reuters.
Obviously, most business executives will never earn anywhere near $1 trillion. The median pay for CEOs was $206,420 a year as of May 2024, according to the latest data from the U.S Bureau of Labor Statistics. The median pay for all types of top executives was $105,350.
Those are very good salaries — but they won’t necessarily make you fabulously wealthy. So how do CEOs and other execs really get rich? Here’s a closer look.
Choose The Right Employer
Maybe the biggest factor in how executives get rich is the company they work for. A company’s size and “complexity” were cited first in a list of seven factors that influence executive compensation, according to a study from the Yale School of Management.
As the study noted, large companies “make more profits” and pay their executives other benefits beyond just the base salary. Meanwhile, smaller firms and startups make less money and their executives “have fewer responsibilities,” so they earn less money.
This is backed up by the numbers. While the median CEO pay across all companies is less than $207,000 a year, that figure is a whole lot bigger for CEOs of companies that belong to the S&P 500.
An analysis from the AFL-CIO found that in 2024, CEOs at S&P 500 firms earned an average total compensation of $18.9 million a year — more than 90 times higher than the typical CEO pay.
It’s Not Just About Salary
For the richest CEOs, annual salary plays a comparatively minor role in overall compensation. The lion’s share of their wealth comes from bonuses, stock holdings and other perks and incentives.
Here’s a breakdown of how the typical CEO of an S&P 500 company is compensated, according to the AFL-CIO:
| Pay Type | Average Amount |
| Salary | $1,265,452 |
| Bonus | $3,918,737 |
| Nonequity incentives | $3,183,079 |
| Restricted stock | $8,968,909 |
| Stock options | $1,087,760 |
| Retirement plans | $1,198,469 |
| Other perks | $807,623 |
Additional Factors
Other factors that play a role in how senior executives get rich include the following, according to the Yale School of Management.
- Industry type: Certain industries generate a lot more revenue than others — including technology and healthcare. Executives in the biggest industries tend to earn much higher pay than those in smaller or less essential industries.
- Competition for skills: Execs with skill sets that are in high demand are much better compensated than those who are easily replaceable. That’s partly why CEOs like Berkshire Hathaway’s Warren Buffett and Meta’s Mark Zuckerberg are among the world’s richest people.
- Company performance: When a company does well, its top execs also tend to do well through large bonuses and other performance incentives.
More From GOBankingRates
