Elon Musk’s record-setting compensation packages from Tesla and SpaceX are reshaping executive CTC across corporate America, with S&P 500 boards increasingly using them as a benchmark for larger CEO pay, an American Federation of Labour and Congress of Industrial Organisations study found, according to a Reuters report. 8 million in 2025, data released on Thursday by the AFL-CIO showed.

It was the highest figure since the AFL-CIO began tracking CEO pay in the 1990s. Labour officials attributed the increase to a growing number of mega-pay packages inspired by Musk’s Tesla compensation plan, which could be worth as much as $1 trillion if he meets all its targets.

Tesla shareholders approved the restricted-stock plan in November, with the company valuing it at $158 billion. 1 million last year, according to the AFL-CIO’s latest Paywatch study.

Musk’s pay “changes the dynamic when other CEO compensation plans come up, boards use it as a reference,” Fred Redmond, the AFL-CIO’s secretary-treasurer, told Reuters in a telephone interview. Meanwhile, employee wages are being held back by the rise of artificial intelligence and a Republican-led National Labour Relations Board, which labour leaders view as hostile to union-organising efforts, Redmond said.

Excluding Musk’s Tesla compensation, the average CEO-to-worker pay ratio at S&P 500 companies widened to 312:1 last year from 285:1 in 2024. “As we talk to our members, they're pissed off over what's happening to them, and they feel as though they should be more vocal in terms of calling attention to inequality,” Redmond said.

He noted that union representation had reached its highest level in 16 years. Rising CEO pay and inequality have fed into broader political debates over why US workers struggle to afford housing, healthcare and other necessities.

The mean annual wage for US workers was $69,770 in May 2025, up 3% from a year earlier, according to Labour Department data. Corporate compensation committees often argue that executive pay plans are tied to shareholder value and incentivise executives to deliver results.

They also note that investors, including the largest asset managers, usually support such proposals at annual meetings. 4% for all of 2025.

Special awards draw scrutiny. “These awards, which are usually intended to be one-offs and exist outside of annual compensation programs, are a hot-button issue,” the firm found.