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Date: Thu, Apr 17, 2014 at 7:39 PM<br>Subject: Other News - CEOs at Big U.S. Companies Paid 331 Times Average Worker<br><br><div dir="ltr"><div dir="ltr"><div style="font-size:12pt;font-family:'Calibri'"><div style="font-style:normal;font-size:small;display:inline;font-family:"Calibri";text-decoration:none;font-weight:normal">
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<div><b>CEOs at Big U.S. Companies Paid 331 Times Average
Worker</b></div>
<div><b></b> </div>
<div><b><i><font>By Jim
Lobe</font></i></b></div>
<div> </div>
<div>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.</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>Obama’s focus on inequality — and the dangers it poses — has gained some
important intellectual and even theological backing in recent months.</div>
<div> </div>
<div>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.”</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>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”.</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>“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.</div>
<div> </div>
<div>“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.”</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>“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.</div>
<div> </div>
<div>“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.”</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>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.</div>
<div> </div>
<div>“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.</div>
<div> </div>
<div>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.</div>
<div>
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