The income gap has only become larger in the past few years, as the stock market saw record gains. And the inequality is particularly glaring in the pay packages of the country's chief executives.

All 50 of the highest paid CEOs of Minnesota public companies in 2021 earned more than $1 million from salary, bonuses and realized stock awards, with the median pay package at $6 million. Thirteen chief executives earned more than $15 million, three over $50 million.

In a national survey of 200 large companies by compensation consulting firm Equilar for the New York Times, the 10 highest paid executives in 2021 all had packages over $100 million, with average compensation $330 million, the highest ever. (Equilar/NYT uses a different formula to count total compensation.)

In the Star Tribune's review of Minnesota public company proxies, only one CEO made more than $100 million: David Ossip of Ceridian HCM Holdings, who earned $120.5 million, mostly from stock awards.

The big question is whether the pay is justified, especially compensation built on long-term equity awards — and how it affects the performance of the companies. In Minnesota, 43 of the 50 highest paid CEOs saw most of their gains come from long-term equity awards.

"Twenty million dollars in compensation wouldn't bother me a bit, if what that individual did was add $300 million to $500 million worth of asset value for the firm — and the employees got some of that," said James Bailey, a professor of leadership at the George Washington University School of Business.

While numbers vary, sometimes widely, from company to company, employees are at least not getting the same share of wealth from a firm's equity.

The Economic Policy Institute, an independent nonprofit think tank that studies economic trends, looked at the pay of CEOs at the 350 largest companies in the U.S. each year by revenue. One finding: Compensation was $1.7 million in 1978 and rose 1,322% to $24.2 million by 2020.

CEO pay grew 60% faster than the overall stock market during that time. Typical worker income in the industries those 350 CEOs represented grew 18%, indicative of growing income inequality.

Another sign: The gap between CEO pay to worker pay also has steadily widened over the past 20 to 30 years.

In our list of the 50 highest paid CEOs in Minnesota, the CEO-to-worker pay ratios range from 13-to-1 at Northern Oil and Gas to 775-to-1 at Target. Pay ratios vary greatly between industries and tend to be highest in service and retail companies that depend heavily on part-time and seasonal employees, whose pay is included in the calculations.

Another measure pointing to inequality over that time period is what economists call labor share, which measures how much of total income can be attributed to labor in the form of worker wages, salaries, bonuses and other benefits.

Labor share is measured against capital share, which, simplified, is what contributes to the rest of the income. Major drivers of capital share include income from people who own their own businesses or shares of a company, or rent their land.

The percentage between the two was relatively stable for decades. But the labor share started to decline noticeably in the 1970s and 1980s and has trended down faster since the start of the new century.

In 35 developed countries, the labor share fell from 54% in 1980 to 50.5% in 2014, according to a 2019 report from McKinsey & Co.

The U.S. saw the sharpest drop-off from 2000 to 2016, when labor share fell from 63.3% to 56.7%, with a commensurate increase in capital share.

Cheaper overseas labor and increased productivity associated with capital improvements, including software and automation, are big factors in the decline. So the rise of this century's mega companies like Apple, Microsoft, Alphabet and Amazon, each with trillion-dollar valuations, have contributed to the downward shift in labor share.

So have the wealth of billionaire founders and CEOs, as the percentage of their income attributed to equity awards increases, said Louis Johnston, a professor of economics at the College of St. Benedict and St. John's University.

An executive's salary, cash incentive bonus and certain benefits contribute to labor share, he said. Their gains from long-term equity awards, including stock options and restricted shares, contribute to capital share.

The decline in labor share also coincides with the rise of what Johnston calls the super CEO.

"They can come in and they can either handpick the board or shape it, and then negotiate a pay package" to their liking, Johnston said. "So they can really shape how much they get in terms of stock options versus salary."

The Equilar/New York Times compensation report pointed to the $2.3 billion pay package of Tesla CEO Elon Musk in 2018 as a turning point. The package was largely made up of long-term equity awards and it influenced other companies to take a similar approach to their CEO compensation packages.

While long-term equity awards have become a bigger piece of compensation — and in recent years led to more mega packages — executive pay has steadily been rising.

The 50 highest paid CEOs of public companies in Minnesota last year realized a collective $648.4 million in the previous year; 75% came from previously issued stock options that were exercised or restricted shares that vested.

In 2020, the 50 highest paid CEOs in Minnesota realized $647.2 million, with 82% of the total coming from long-term equity awards.

On the New York Times/Equilar annual CEO compensation list, 171 of the 300 CEOs made more than $20 million. That list counts total compensation closer to what appears in the proxies.

In the ninth spot on that list was Mike Mikan, CEO of Bright Health Group. The company on its proxy calculated Mikan's 2021 pay package as valued at $180 million, so that's the figure Equilar used. That total included the grant date value of equity awards.

Under the Star Tribune's formula, Mikan's realized compensation was $2.3 million, which put him 42nd on the Minnesota list.

The Star Tribune for more than 30 years has counted the realized value of executive compensation plans. Over that time, only one of the top 15 realized pay packages of Minnesota executives, all above $72 million, was before 2000; 11 have been since 2005.

Over the last two years, Ceridian's Ossip earned nearly $230 million, gaining more than $100 million each year from exercising previously issued stock option awards.

As the pandemic upended the economy in 2020, many CEOs took voluntary salary cuts. During the uncertain stock market conditions since then, they also may have been reluctant to cash in long-term equity awards.

Those who showed patience were rewarded when the market rebounded late in 2020, and earned even more when stocks surged higher in 2021.

This year's stock market performance so far means the stock award values are down — which could mean next year's compensation packages will not be valued as high.

Historically, equity markets have more up years than down, and most CEOs will see the benefit of that. But workers who rely on salary and bonuses will see less of that growth, and income disparity may continue to grow.

"In a sense, you've got this negotiation between labor and capital," Johnston said. "But capital has become much more powerful and has a much more powerful negotiating position relative to labor."