Katrina vanden Heuvel: Confronting the CEO Pay Gap

[marmar]

from The Nation:


BLOG | Posted 08/29/2007 @ 08:28am
Confronting the CEO Pay Gap


The staggering gap between CEOs and workers is, at long last, getting some attention in Campaign '08. But there's still more to be done to tackle the gap. If candidates really want to turn up the heat with some well-documented, explosive facts, I'd advise them to check out the invaluable report released today by the Institute for Policy Studies and United for a Fair Economy.

I'd like to hear Senator Hillary Clinton make a stink about how the top 20 private equity and hedge fund managers pocketed an average of $657.5 million--22,225 times the pay of an average worker. I'd like to see candidates tackle the gross inequities in an economy in which the 20 highest paid figures in the private equity and hedge fund industry collected 3,315 times more in average annual compensation in 2006 than the top 20 officials of the federal government's executive branch--and that includes Bush and Cheney (when he'll cop to being part of that branch).

And while they deploy these heart-wrenching stats, I'd like to hear all of the candidates blast Senator Chuck Schumer for betraying the best traditions of the Democratic party by refusing to increase taxes on those fabulously rich hedgers and equity guys.)

There's much more in this terrific report. For example, overall, the 20 highest-paid executives of publicly traded corporations made, on average, 38 times more than the country's 20 highest-paid nonprofit leaders last year. The pay gap stretches even wider between the corporate and public sector. In 2006, the top 20 highest-earning CEOs made 204 times more than our 20 highest-paid military generals, and 212 times as much as the top 20 ranking members of Congress.

The report highlights six practical proposals for change--initiatives that include eliminating perverse tax incentives for excessive pay and using government contracting dollars to encourage more reasonable compensation. Tackling the gap is going to take concerted citizen action, smart research and bold policy changes. But the times are ripe. As the report's co-author Chuck Collins puts it, " Meaningful change could be on the horizon, as many political leaders are finally catching up to the public outcry to rein in excessive compensation."

http://www.thenation.com/blogs/edcut?bid=7&pid=227579

[Robson]

1. You won't hear it from Hillary

As if the CEO gap isn't outrageous enough we find the private equity and investment bankers really sucking the dollars from our economy. Their combined strippage of wealth from the greater economy is a core reason why American workers are having their pay and benefits cut.

Hillary wasn't elected NY Sen Clinton to kick sand in the face of the undertaxed, over compensated rich barons of Wall St. and NYC. One could say Hillary is likely very satisfied with the way things are going, and where Wall St interests contribute mightily to her campaign.

[Phoebe Loosinhouse]

2. "PUBLICLY traded corporations " is the key phrase

Now I will make the same points I do ad nauseum hoping that if I say it enough it will begin to take root.

The job of executives at "publicly traded companies" is to MAKE MONEY FOR THE SHAREHOLDERS - not to siphon it off for themselves in gigantic cookies that they take out of the cookie jar. Their shareholders get remaining crumbs and their employees and retirees get the crumbs of the crumbs.

They are taking money that rightfully should be plowed back in the form of capital improvements or research and development or to shore up those pension plans they are always asking for government bail-outs of or screwing their retirees out of.

They also "hide" compensation in the form of perks you don't even know about (Remember Jack Welch and the penthouse and the jets and the toilet paper?) as well as stock options.

All executive compensation should be in plain English in their prospectus along with perks and bennies and options so that someone buying their stock might say, "gee, I'm investing my dollars in this company in order to pay the CEO hundreds of millions of dollars so that I might get a measley return in dividends or I can pray the stock price goes up and I'm smart enough to sell before other people catch onto the Ponzi aspects of this."

They and the boards that approve this legal(?)looting should be hauled out in manacles for defrauding the stockholders. They are crooks!!They are also undermining the confidence in the stock market. These guys often get their gazillions regardless of how their companies do. Don't even get me started on the golden parachutes!

I don't care what privately held companies do. But I do think executive compensation in publicly held companies should be examined and yes, (gasp!) regulated. 100 times the average company salary would make the head of WalMart or any other company share the wealth with the employees and actually WANT them to be paid a decent wage. Any excess after operating expenses and capital improvements and R&D is PROFIT that should be distributed to the shareholders. They (the CEOs) can get their extra money in dividends in the company stock they own just like the rest of us.

[antigop]

3. But, but, but....it's the free market

Employees are FREE to work elsewhere.

And shareholders are FREE to move their money elsewhere.

:sarcasm:

[Robson]

4. Thank you

You've provided one of the best and most succinctly stated analyses of why CEOs of public corporations are grossly overpaid. Under curremt policy they get the gold and the cookies, and the employees and shareholders get the crumbs.

It's all about short term benefits for them, not about long term benefits for the company as it should be.

CEOs are not gods that lead corporations to long term financial success. They are merely greedy humans that will entice others such as Wall St and investment bankers to structure deals so that they are the primary beneficiary, even if it cannibalizes the company.

Under current philosophy shareholders, employees and the greater USA most likely will not end up with any tangible benefit and may in the end be screwed.

[Skittles]

5. ABOUT F***ING TIME

isn't it strange how repukes don't think pay for these greedy bastards should not be capped but they certainly feel differently about the minimum wage

[antigop]

6. Yep, I'd like to hear Hillary make a stink about hedge fund managers' pay

Ain't gonna happen.