How the Average Employee Raise Compares to the Average CEO Raise

Angela Mae

Fri, Jun 27, 2025, 1:03 PM 4 min read

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.

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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.

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%.

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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.