STOCK MARKET WATCH -- Friday, 5 December 2014

[Demeter]

14. WSJ on CEO Pay! Why They Hate The Truth, And Why We Should Spread It

http://www.dailykos.com/story/2014/12/02/1348968/-WSJ-on-CEO-Pay-Why-They-Hate-The-Truth-And-Why-We-Should-Spread-It?detail=email


This article is by my friend John Lacny, a Pittsburgh-based labor activist. He wrote it at my request for my blog, Fire on the Mountain. Lacny possesses a pitiless eye for the mechanisms of domination employed by big capital, which make his pieces, like this one, a delight to read.

One of the first bitter lessons you learn as an activist is the fact that just because people know the truth does not mean that things are going to change. People have to actually do something about it -- and organizing them to do something about it is one of the toughest things in the world, not least because it requires you to inspire people to believe that it is possible to change things. That said, our adversaries are well aware that mass-based knowledge is a dangerous thing for them, which is why they invest so much effort in obscuring the facts. An especially illuminating example of this can be found in an article that appeared in the house organ of capital, the Wall Street Journal, just before Thanksgiving. It is entitled "The Boss Makes How Much More Than You? Controversial New Rule Would Make Companies Disclose Data," and it is accompanied by an illustration in which the average CEO is represented as a gigantic pig. (The average worker is portrayed as a much smaller piggy bank, but what do you expect from the WSJ.)

The subject is a new rule by the Securities and Exchange Commission, which would require US companies traded on Wall Street to disclose the ratio of pay between their CEO and their median employee. This rule has been a long time coming, and is the result of 2010's Dodd-Frank financial reform act. Dodd-Frank was a mild financial reform that has more than a few shortcomings, but much like the Affordable Care Act -- which is of similar vintage -- even its mildly progressive features have a way of causing vested interests to break out in hives. The Wall Street Journal notes that the proposed rule about the CEO-worker pay ratio attracted more than 128,000 comments. Think about this for a minute. Do you know of the obscure website where people can comment on proposed SEC rules? Do your friends? How many of the people you know are even aware of the SEC's existence? Then think about the effort it takes to get someone to comment, and to get that to happen 128,000 times. Is this a grassroots movement that you're unaware of? Not likely, but it is an action encouraged by people who have a hell of a lot of money. And the usual suspects in Congress have responded to the demands of their constituency: Texas teabagger Jeb Hensarling, who chairs the House Financial Services Committee, sent a letter along with two other Republicans calling on the SEC to delay implementation of the rule.

The Journal writes: "Critics say such pay ratios matter little to investors and could make executives easy targets for populist anger or hostile shareholders." Note the explicit values here: These people are quite clear that the purpose of the SEC and the disclosures it requires of companies is to protect investors, not the public at large, and certainly not the people who actually do the work that makes the profits for publicly-traded companies. Nevertheless, bosses are resigned to the likelihood that they'll have to comply with the rule, and with the desperate determination to mount a defense before they are carted away on the tumbrels, they are putting resources where it matters: into pure PR and HR bullshit artistry. Witness the Journal:

Some employers are taking steps to plan for the possibility of internal morale problems, negative press and an investor outcry over the sizable gulf in pay between the top and the bottom. Among other things, they intend to expand employee training and shareholder outreach efforts.

The first step is no doubt a lot of board room Power Point presentations, many of them prefaced with an icebreaking joke illustrated by a Dilbert cartoon. You won't see that part. The part you will see is the various company handouts and press releases in which they try to defend the indefensible. Your job as an organizer is to see to it that they fail.

The really funny thing about this is that we already know how much corporate CEOs get paid, because the SEC has required companies to disclose that for years. You can look that up any time you want. It is on a website called EDGAR, hosted by the SEC. Each year, every publicly-traded company files a DEF 14A form, more familiarly known as a proxy statement, and the SEC website has all of these. If you're on a fast food strike, and you want to know how much the CEO of McDonald's makes -- in salary, stock and stock options, bonus, and everything else -- you can look that up. (It was nearly $9.5 million last year, by the way.) So they're not really worried about the disclosure of CEO pay. What they're really worried about is that we will learn how little the rest of us make:

Half of your workforce is going to ask, "Why am I paid below the median?" said Jill Kanin-Lovers, a retired human-resources executive, at a National Association of Corporate Directors conference. "That's going to be really explosive."

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