[discuss] CEOs at Big U.S. Companies Paid 331 Times Average Worker
Louis Pouzin (well)
pouzin at well.com
Thu Apr 17 19:21:48 UTC 2014
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From: <english at other-news.info>
Date: Thu, Apr 17, 2014 at 7:39 PM
Subject: Other News - CEOs at Big U.S. Companies Paid 331 Times Average
*CEOs at Big U.S. Companies Paid 331 Times Average Worker*
*By Jim Lobe*
WASHINGTON, Apr 2014 (IPS) - In new data certain to fuel the growing public
debate over economic inequality, a survey released Tuesday by the biggest
U.S. trade-union federation found that the CEOs of top U.S. corporations
were paid 331 times more money than the average U.S. worker in 2013.
According to the AFL-CIO's 2014 Executive PayWatch database, U.S. CEOs of
350 companies made an average of 11.7 million dollars last year compared to
the average worker who earned 35,293 dollars.
The same CEOs averaged an income 774 times greater than U.S. workers who
earned the federal hourly minimum wage of 7.25 dollars in 2013, or just
over 15,000 dollars a year, according to the database.
A separate survey of the top 100 U.S. corporations released by the New York
Times Sunday found that the media compensation of CEOs of those companies
last year was yet higher -- 13.9 million dollars.
That survey, the Equilar 100 CEO Pay Study, found that those CEOs took home
a combined 1.5 billion dollars in 2013, slightly higher than their haul the
previous year. As in past years, the biggest earner was Lawrence Ellison,
CEO of Oracle, who landed 78.4 million dollars in a combination of cash,
stocks, and options.
The two surveys, both released as tens of millions of people filed their
annual tax returns, are certain to add to the growing public debate about
rising income and wealth inequality.
It is a theme that came to the fore during the 2011 Occupy Wall Street
movement and that President Barack Obama has described as the "defining
challenge of our time" as the 2014 mid-term election campaign gets
underway. He has sought to address it by, among other measures, seeking an
increase the minimum wage, extending unemployment benefits, and expanding
overtime pay for federal workers.
Obama's focus on inequality -- and the dangers it poses -- has gained some
important intellectual and even theological backing in recent months.
In a major revision of its traditional neo-liberal orthodoxy, the
International Monetary Fund (IMF) last month released a study raising the
alarm about the impact of negative impacts of inequality on both economic
growth and political stability, with IMF Managing Director Christine
Lagarde warning that it created "an economy of exclusion, and a wasteland
of discarded potential" and threatens "the precious fabric that holds our
Pope Francis has also spoken repeatedly - including in a private meeting
with Obama at the Vatican last month - about the dangers posed by economic
inequality, while the World Economic Forum's Global Risks Report, published
in January, identified severe income disparity as the biggest risk to
global stability over the next decade.
Meanwhile, an epic new study by French economist Thomas Piketty, 'Capital
in the Twenty-First Century,' that compares today's levels of inequality to
those of the Gilded Age of the late 19th century, is gaining favourable
reviews in virtually every mainstream publication.
Piketty, whose work is based on data from dozens of Western countries
dating back two centuries and argues that radical redistribution measures,
including a "global tax on capital," are needed to reverse current trends
toward greater inequality, is speaking to standing-room-only audiences in
think tanks here this week.
In addition, the Supreme Court's ruling earlier this month lifting the
aggregate limits that wealthy individuals can contribute to political
campaigns and parties has added to fears that, in the words of a number of
civic organisations, the U.S. political system is moving increasingly
towards a "plutocracy".
Of all Western countries, income inequality is greatest in the United
States, according to a variety of measures. In his book, Pikkety shows that
inequality of both wealth and income in the U.S. exceeds that of Europe in
The 331:1 ratio between the income of the 350 corporate CEOs in the Pay
Watch survey and average workers is generally consistent with the pay gap
that has prevailed over the past decade.
That ratio contrasts dramatically with the average that prevailed after
World War II. In 1950, for example, the differential between the top
corporate earners and the average workers was only around 20:1. As recently
as 1980 - just before the Reagan administration began implementing its
"magic of the marketplace" economic policies - the ratio had climbed only
to 42:1, according to Sarah Anderson, a veteran compensation watcher at the
Institute for Policy Studies here.
"I don't think that anyone, except maybe Larry Ellison, would claim that
today's managers are somehow an evolved form of homo sapiens compared to
their predecessors 30 or 60 years ago," said Bart Naylor, Financial Policy
Advocate at Public Citizen, a civic accountability group.
"Those who built the pharmaceutical industry and the hi-tech industry ...were
fine senior executives, and they didn't drain the economy the way today's
senior executives insist on doing," he told IPS. "The machinery of awarding
senior executive pay is clearly broken."
What is particularly galling to unions and their allies is that many top
companies argue that they can't afford to raise wages at the same time that
they are earning higher profits per employee than they did five years ago.
While the average worker earned 35,293 dollars last year, the S&P's 500
Index companies earned an average of 41,249 dollars in profits per employee
- a 38 percent increase.
"Pay Watch calls attention to the insane level of compensation for CEOs,
while the workers who create those corporate profits struggle for enough
money to take care of the basics," said AFL-CIO President Richard Trumka.
"Consider that the retirement benefits of the CEO of Yum Brands, which owns
KFC, Taco Bell, and Pizza Hut, has benefits of over 232 million dollars in
his company retirement fund, all of which is tax deferred," said Anderson.
"It's quite obscene when you know it's a corporation that relies on very
Congress is currently considering several measures to address the issue,
although most of them are opposed by Republicans who enjoy a majority in
the House of Representatives.
Nonetheless, a tax package introduced by the Republican chairman of the
powerful House Ways and Means Committee would close one large loophole that
permits CEOs to deduct so-called "performance pay" - what they earn when
they achieve certain benchmarks set by their board of directors - from
"It's pretty outrageous when the CEOs of some of the biggest companies of
the National Restaurant Association are essentially getting heavily
subsidised when so many of their workers are relying on public assistance
and fighting for an increase in the minimum wage," Anderson told IPS.
In addition, the Securities and Exchange Commission (SEC) is expected to
formally adopt a long-pending rule that would require publicly held
corporations to disclose how the pay received by their CEO compares to that
of their employees, including full-times, part-time, temporary, seasonal
and non-U.S. staff.
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