You Might Be Wealthier Than Most CEOs If You Have This Net Worth

Presumably, CEOs are the most paid executives of any organization — at least in terms of income level. The most paid CEOs in the world earn total compensation in the millions and billions. It's easy to know how much these big public company execs earn because the information is public, but the vast majority of CEOs in the U.S. are actually in charge of private, small-to-medium businesses. Their income, wealth, and net worth remain hidden, and we could never possibly know it.

However, the closest thing we have to this information is the Federal Reserve's Survey of Consumer Finances (SCF), from which it compiled statistics on changes in U.S. family finances from 2019 to 2022. This report included information for business-owner employers, individuals who own businesses and employ people to work in them. These business owners can represent CEOs for the sake of this, since, realistically, these owners would most likely be working as CEOs in the companies they own. Gallup processed that report from the Federal Reserve and came up with a figure for the median net worth of such business-owner individuals: $3 million. 

For context, that's over six times higher than the median net worth of people who have a college degree. With big and expensive cities having home prices averaging around $1 million, that figure isn't unrealistic, seeing as a house alone can account for a third of that wealth. Therefore, to count yourself as wealthier than most CEOs (based on net worth), you'd need over $3 million in assets.

If you're comparing your income against that of an occupational "chief executive," you don't need to earn in the millions to make more money than most CEOs. The Bureau of Labor Statistics (BLS) states that the median annual wage for chief executives was $206,420 as of May 2024. Taking a look at the average income of some upper-class jobs, you'll quickly realize that there are many professions that will give you a better income than most CEOs.

The catch, though, is that CEOs don't need to earn that much in income to be wealthy. Since many of them own stakes in the business, by virtue of the business doing well, they also increase their wealth. Some CEOs, like Jeff Bezos, purposefully have low salaries as a way to avoid income tax. In fact, according to SEC disclosures, Jeff Bezos' base salary was $81,840 for 20 years. That doesn't take away from the fact that he was a billionaire for a good chunk of that time.

This highlights the fundamental differences in strategy between a wage earner and an equity owner. While wage earners are trying to maximize their incomes, many CEOs prioritize the value of an appreciating asset. For small business owners, taking a large salary as a CEO would undermine the business, especially in volatile times. It's better to reinvest in the business, pay the employees, and only take home what the business supports.