General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsRobert Reich: The Significance of Citigroup’s Shareholder Revolt
The shareholders of Wall Street giant Citigroup are out to prove that corporate democracy isnt an oxymoron. Theyve said no to the exorbitant $15 million pay package of Citis CEO Vikram Pandit, as well as to the giant pay packages of Citis four other top executives.
The vote, at Citigroups annual meeting in Dallas Tuesday, isnt binding on Citigroup. But its a warning shot across the bow of every corporate boardroom in America.
Shareholders arent happy about executive pay.
And why should they be? CEO pay at large publicly-held corporations is now typically 300 times the pay of the average American worker. It was 40 times average worker pay in the 1960s and has steadily crept upward since then as corporations have morphed into winner-take-all contraptions that reward their top executives with boundless beneficence and perks while slicing the jobs, wages, and benefits of almost everyone else.
Meanwhile, too many of these same corporations have failed to deliver for their shareholders. Citigroup, for example, has had the worst stock performance among all large banks for the last decade but ranked among the highest in executive pay.
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http://robertreich.org/post/21326191050
Citigroup investors give thumbs down to exec pay
http://www.democraticunderground.com/1002576051
WillyT
(72,631 posts)WillyT
(72,631 posts)BR_Parkway
(8,666 posts)ProSense
(116,464 posts)Tula Connell
Moments ago, we launched the 2012 AFL-CIO Executive PayWatch sitenow called CEO Pay and the 99%which includes the most comprehensive data accessible on 2011 executive pay. All of the data available is searchable by industry, by state and by the top 100 highest-paid CEOs. Check it and help us share it widely.
CEO Pay and the 99% shows that a CEO of a company in the S&P 500 Index, on average, received $12.9 million in total compensation in 2011. Thats a 14 percent raise over the previous year. And thats on top of a 23 percent increase in 2010.
In stark contrast, the average wage for workers hovered at $34,000 in 2011. Median household income fell $3,700 over the past decade. And those who are employed received an average 2.8 percent raisebarely keeping up with inflation.
The new site also features data on:
Swelling corporate cash stockpiles. Corporations have a record $2.2 trillion in cash on their balance sheets, according to the Federal Reserve. But rather than reinvest this capital to grow our economy and create jobs, CEOs are not deploying these resources.
The widening gap between CEO-to-worker pay. Last year, this ratio of CEO-to-worker pay had widened to an astonishing 380 times. In 1980, CEOs of large U.S. companies made 42 times the average wages of workers.
Mutual funds votes on executive pay. Mutual funds wield enormous clout on CEO pay issues in part because of the new say-on-pay requirement that shareholders cast an advisory vote on CEO pay. In this new section, investors can look up how their mutual funds voted and ask their mutual funds to vote against runaway CEO pay levels.
The shady world of private equity, which Mitt Romneys candidacy has brought to light.
You also can take action to rein in out-of-control CEO pay: Send an e-mail to the U.S. Securities and Exchange Commission and urge it to implement the Dodd-Frank Wall Street Reform and Consumer Protection Acts requirement that public companies disclose their ratio of CEO-to-worker pay.
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http://www.aflcio.org/Blog/Economy/New-Today-CEO-Pay-and-the-99
corpgov.net
(2 posts)Yes, there are certainly difficulties in having employee voices heard. Management holds disproportionate shares, ESOPs and other vehicles are often structured so that management votes the shares. Reforms are sorely needed. However, employees, certainly if they organize, can make a real difference through their proposals and their votes. I don't understand here why Morgenson seems to say one employee group was recently the first to put up a proposal but later talks of more historical proposals from labor groups.
As I recall, the first proposal ever to get a majority vote was from the gadfly Gilbert brothers at Chock Full of Nuts. However, the second proposal, and I think it was the very next year long ago was from employees at either the Sante Fe railroad or Southern Pacific railroad. In older companies with multigenerational family employment, grandparent, parent, and grand children the block of stock owned by the employees and their families can be one of the largest blocks.
Mobilizing these folks through organizations like the United States Proxy Exchange (USPX or proxyexchange.org) and working closely with SRI, pension and other sympathetic funds can make a real difference. USPX has posted guidelines on how to vote say-on-pay proxy measures (takes about 60 seconds to figure out how to vote at any specific company). They also have developed model proxy proposals on proxy access (allowing shareowners to place their nominees on the proxy). It would be good to develop a model proxy access proposal that also does a better job of factoring in the voice of employees.