[discuss] CEOs at Big U.S. Companies Paid 331 Times Average Worker
Shatan, Gregory S.
GShatan at ReedSmith.com
Thu Apr 17 20:21:33 UTC 2014
France won't force companies to cap executive pay
By SARAH DiLORENZO<http://bigstory.ap.org/content/sarah-dilorenzo>
— May. 24, 2013 8:50 AM EDT
PARIS (AP) — The French government is trying to woo executives and entrepreneurs, amid concerns that it has antagonized the businesses needed to reinvigorate the economy.
Finance Minister Pierre Moscovici announced Friday that the government no longer plans to push for a law to cap executive salaries in the private sector. Instead, Moscovici told reporters that he was in discussions with business leaders and he hoped companies would agree to institute their own limits. He did not give details.
He did hold out the possibility, however, that the government could resort to passing a salary cap if it wasn't pleased with what companies come up with.
"If we are not satisfied, if we aren't able to get measures that allow us to effectively control salaries, that also allow for better information on salaries to be given to shareholders, then, at that moment, I don't exclude the possibility that we could legislate," he said, on the sidelines of a press conference.
The Socialist government last year cracked down on what it viewed as excessive pay for executives at a time when employees are losing their jobs or being asked to take pay cuts. It imposed limits on executive pay at state-run companies, and initially pledged to do the same in the private sector. It is also pursuing a 75-percent tax for salaries above 1 million euros ($1.3 million), to be paid by employers.
Moscovici's comments came after he announced that the government was backing down on the salary cap in an interview with the French newspaper Les Echos.
Friday's announcement was the not the first time the government has pulled back from a measure that pleased the Socialist Party's left wing but infuriated business leaders.
President Francois Hollande has already made an important about-face on a hike to the capital gains tax rate that entrepreneurs said would take away all incentive for starting new businesses. Last month, Hollande announced that entrepreneurs selling their businesses would get big tax breaks instead.
France's economy is officially in recession, and its unemployment rate is at 11 percent. Economists say that to turn things around, Hollande needs to move more quickly and boldly on reforms, like lightening the tax burden that companies face and simplifying regulations.
Part of the government's response to this criticism was to offer a rebate on companies' payroll taxes, which are the highest in the European Union.
The credit will eventually give companies up to 6 percent back on payroll taxes. Normally, companies would not see any money before next year, when they pay this year's tax bill. But the government has set up a system of "pre-financing" so companies can apply to receive their credit immediately — in the hopes they'll put the cash toward hiring or investment now.
But some studies have shown companies have been reluctant to apply for the pre-financing, either because the process was too complex or because they feared it would carry a stigma of desperation.
Moscovici was trying to allay those concerns at a press conference on Friday with representatives for French banks, businesses, accountants and public funds. Some representatives acknowledged that they'd heard that companies weren't sure how to apply.
The government says that 3,500 companies so far have submitted requests for a total of 550 million euros worth of advances on the tax credit — though not all that money is yet in the hands of companies.
It hopes to hand out 2 billion euros in advances this year and to provide 13 billion euros in tax credits overall.
"We are in a rhythm, it's going fast, and it's going well," said Moscovici. But he added that banks still have to move more quickly.
From: discuss-bounces at 1net.org [mailto:discuss-bounces at 1net.org] On Behalf Of Louis Pouzin (well)
Sent: Thursday, April 17, 2014 3:22 PM
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Subject: [discuss] CEOs at Big U.S. Companies Paid 331 Times Average Worker
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From: <english at other-news.info<mailto: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 Worker
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 society together.”
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 1900.
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 low-paid labour.”
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 their taxes.
“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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