The pay gap between corporate leaders and workers at low-wage companies narrowed a little between 2022 and 2023, but it’s still huge, according to a report that was released Thursday.

In addition, those leaders invested far more heavily in a strategy that boosts their already-lavish pay than they did in employee retirement benefits. Nearly half of them even invested more in the strategy — stock buybacks  — than they did in their own companies, the report said.

The report, Executive Excess 2024, is the 30th such report by the Institute for Policy Studies, a think tank that examines inequality, among other topics.

The report looks at the 100 S&P 500 corporations with the lowest median worker pay and monitors changes from one year to the next.

A topline finding in this year’s report is that the gap between CEO pay and the middle-paid employee actually fell between 2022 and 2023. That might be due to the fact that the Inflation Reduction Act of 2022 imposed a 1% excise tax on them.

However, the difference remains vast, dropping from the chief executive getting 603 times what the median employee got, to 538. The slight narrowing of the pay gulf is due both to a 9% increase in median worker pay — to $34,522 in 2023 — and a 4% drop in CEO pay — to $14.7 million, the report said.

Such huge disparities between the money the top boss makes and the median worker does aren’t just an issue of fairness. The divergence between executive and worker pay helps drive income inequality in the United States, and that’s been linked to higher rates of crime, greater consumer debt, and poorer health outcomes, a separate report from last year said.

This year’s Executive Excess report again looked at a major mechanism through which CEO’s boost their pay.

When they decide to use company revenue to buy back stock, they’re serving themselves because much of their compensation comes in the form of company stock. The value of that stock increases with demand, and buybacks boost demand.

That dynamic can create warped incentives for executives to put their own interests ahead of those of their companies and their employees. And in many cases, the Low Wage 100 spent more on buybacks than they spent on their companies.

In total, the companies spend more than a half-trillion dollars on buybacks over the five years ending in December, while they made three-quarters of a trillion in capital expenditures over the same period, the report said.

Even so, nearly half of those companies — 47% — spent more on buybacks than they made in capital expenditures.

And while CEOs are spending heavily in ways that will add comfort to their own, already-cushy retirement, they’re spending far, far less on retirement benefits for their employees.

The biggest disparity among the 20 largest low-wage employers was for Chipotle Mexican Grill. It spent $2.1 billion on buybacks over five years, while spending just $24 million on retirement benefits for its 114,000 employees, the report said. In other words, Chipotle spent nearly 50 times as much on buybacks over the period as it did on retirement benefits for its employees.

Meanwhile, CEO Brian Niccol’s compensation in 2023 alone — $22.4 million — was almost equal to retirement benefits paid out to all company employees over the last five years combined.

Among the 20 largest low-wage employers, Cincinnati-based Kroger had one of the lowest buyback-to-employee retirement ratios. Even so, it spent almost four times as much on buybacks as it did on employee retirement over the five-year period, the report said.

In addition to the 1% excise tax on buybacks imposed by the Inflation Reduction Act, other measures are being taken to curb the practice. Sens. Sherrod Brown, D-Ohio, and Ron Wyden, D-Oregon, have authored a bill that would quadruple that percentage.

In addition, the Biden administration has proposed preventing executives from selling their stock over a multi-year period after a buyback, “preventing CEOs from timing share repurchases to cash in personally on a short-term price pop they themselves have artificially created,” the report said.

This story was first published by the Ohio Capital Journal, a States Newsroom affiliate.