How the Average Employee Raise Compares to the Average CEO Raise
Written by
Angela Mae
Edited by
Zuri Anderson
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Whether you’re a typical worker or a CEO, it never hurts to get a pay raise. But like base salary and overall compensation packages, raises can vary based on your experience level, industry and job title — among other things.
Both employees and CEOs saw raise hikes in recent months, but not at the same rate. Here’s how the average worker’s raise compares to the average CEO raise, as well as why raises are important — for the company and the employee.
CEOs Saw a Greater Raise Hike By Far
In 2024, the average CEO received a 9.7% raise hike — up to $17.1 million. This was thanks to significant increases in stock market prices (up 23% last year) and corporate profits (up more than 9%).
In comparison, the median employee earned $85,419 last year. This is a year-over-year 1.7% increase in overall compensation.
Like CEOs, employees have seen a raise hike over the years, as well. In 2024, the typical raise was up by 3.6%. This year, the average worker is projected to see a salary increase of about 3.5%.
Importance of Raises for the Company
From the company side of things, it might seem like giving raises to the typical employee isn’t worth much, but there are plenty of reasons to the contrary.
Katy Schneider Riddick, an expert in workplace mental health and workplace culture practices, as well as managing director at High Lantern Group, said that salary “remains the most effective and universal way to demonstrate to any employee that they are valued.”
But it goes beyond offering a competitive salary. It’s about increasing those salaries beyond the typical cost-of-living adjustments to ensure the employee — and the organization — continue to thrive. It’s an investment, according to Riddick.
“Non-commission bonuses are appreciated, but are not perceived to be as closely connected to individual success (and are sometimes even communicated as a result of the company having had a good year, for instance),” said Riddick. “If you want an employee to feel like you would fight to keep them around, give them a salary increase instead.”
According to Stratus HR, companies that experience a high turnover rate often experience a less productive workforce and require more time and resources dedicated to recruitment and training. It can even result in a loss of revenue, so it might be worth offering significant raises to support the bottom line.
Importance of Raises for the Employee
The latest data from the Bureau of Labor Statistics shows that the average annual expenditure was $77,280 in 2023 — a number that’s likely increased since then. If the median employee salary is just above $85,000, that doesn’t leave a whole lot of wiggle room for emergencies, investing or debt payoff.
Receiving a significant raise can do wonders for a person’s moral — and their bank account.
“In today’s competitive market, paying fairly and equitably isn’t optional — it’s essential for attracting and keeping top talent,” said Kimberly Brown, founder, learning and development consultant and keynote speaker at Manifest Yourself. “A raise often communicates, ‘We see you, we value you, and we want you here.'”
If you’re looking for a raise, Brown had the following suggestions:
- Figure out your market value based on your industry, experience, role and location.
- Understand your impact and contributions to the organization (having quantifiable results helps).
- Prepare in advance of starting the conversation so you know what you’re asking for.
- Rather than wait for the annual review, set up a separate meeting for negotiations.
Know that some companies will offer more than a base salary, so take a look at your total compensation package, too. This includes things like stock options, annual bonuses, employer-matching retirement contributions and healthcare benefits. It also includes non-monetary perks like wellness stipends, parental leave policies or education reimbursement options.
“Total compensation reflects both immediate income and future value,” said Brown. “What many employees overlook is that benefits like a strong 401(k) match or equity participation can materially shift their net worth over time. Compensation is not just what you take home today — it’s also the infrastructure that supports your growth, stability and lifestyle in the years to come.”
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