CEOs paid 40 x average employee in 1980 -- now 530 x !!

[lostnfound]

Today's Financial Times has an article on skyrocketing CEO salaries. "In 1980, the average Fortune 500 CEO made 40 times more than the average person who worked for him. Last year it was 530 times."

This fact ought to be as common of a 'talking point' in the national consciousness as the 'welfare queen' myth that was flouted by the rightwing during the Reagan era.

But can Democratic candidates really talk about it? No..not if 1) they don't want to lose the significant corporate money which they partake of or 2) they don't want to be attacked as 'class warriors'.

Can we hear about this in the corporate media? Well, the FT did a story on it..but they are the capital-class's own paper. So truth sometimes appears there.

[Erika]

1. Look At The Income Disparity

From 1967 to now, the income disparity climbed 75% between the low and high incomes. Capitalism in total corruption.

[TahitiNut]

10. Look at the Gini Index ...

The Gini Index for 'families' is the more prevalent measure of comparable income distribution within various national economies. Approaching 0.45, the USA is clearly within 'banana republic' range today. Social Democracies (from Germany to Japan to Denmark) achieve the more equitable distribution in the 0.25 to 0.30 range.




The distribution of income among individuals over 14 years of age (the age at which one is permitted to be employed in other than a family business) is even more revealing.

[lostnfound]

20. Those are fascinating graphs. nt

[Lydia Leftcoast]

2. I once heard a talk by mystery writer Sara Paretsky, and she said

that the Wall Street Journal and the Financial Times are the people who run the world telling one another what's really going on.

The WSJ is notorious for its way-off-the-edge-of-the-right-wing editorials, but the articles are usually pretty reliable and accurate--and often contradict what is said in the editorials

[barbaraann]

3. It WAS morning in America for the well-to-do.

And all of their descendants from now to eternity will feel that they deserve to keep it, regardless of the welfare (or lack of welfare) of the common people.

[Nordic]

4. gosh, why isn't the media reporting this??

oh yeah .... i forgot ...... dopey me ............

fuckwad corporate media.


"Shhhhhhh!" Don't let the people hear about THIS one. They might get pissed off!

[Tactical Progressive]

5. You're right, this is a conversation that needs to be out front.

It exemplifies a fundamental evolution of capitalism in a bad direction.
That's people working hard for $6/hr versus others for $3000/hr.
If Republicans had their way it would be $2/hr versus $5000/hr.

I'll make an effort to bring it up more.

[lostnfound]

6. You are right too! (Pubs would prefer 2500 ratio...)

Also interesting was the title of the FT article -- something like "Off the leash -- CEO pay"...

Made me wonder, 'hmmm, who's holding the leash?'

Only in the FT would we find this type of article. The take on it wasn't 'the poor people at the bottom need more'; only that 'the overpaid people at the top need to be on a tighter leash'...
by the owners, obviously.

[ProfessorGAC]

15. It's Already That Bad!

Remember that the ratio being discussed in this thread counts the VP's, Directors, and General Managers in these companies. So, those are some awfully high salaried folks being included in the "people who work for them."

Let's say some CEO is making $40 million in total compensation. It's likely some high ranking Exec. VP would be making at least $15 million.

1000 workers making $50k per year, plus this VP make $65 million. Divide that by 101 and you get $64,350 per year. Now, multiply this by the 530, and you get around the $40 million or so. But, that average of $64,530 is misleading, because that's nearly 29% more than those 1000 people actually make.

So, those line workers are actually being paid 1/800th of what the CEO is getting.

The thing is, there are companies where that's simply not true. There are many companies, publicly traded, where the CEO's total compensation is closer to the number referenced for 1980.

That means there are some real hogs at the trough, because if some CEO's are getting 40 or 50 times the average of all the other worker, there have to some pushing 1000x.
The Professor

[b06jgm]

7. Find out who they are....

and let's boycott the company. That actually hits them harder where they'd have a reality check.

[lostnfound]

8. Excerpts & a link to the FT article, not sure how long it will last

http://news.ft.com/cms/s/f6298804-f56a-11d8-85e9-00000e2511c8.html

In 2003, the earnings growth for the US's largest 500 companies grew by a median 9.6 per cent, according to Standard & Poor's. The median total pay for chief executives in those companies, however, rose by a median 22 per cent, double the rise of 2002, according to the Corporate Library, a US watchdog group. The group said last month that "calls for pay constraint appear to be being ignored".

<snip>
In testimony before the US Congress in June, he pointed out: "In 1980, the average Fortune 500 CEO made 40 times more than the average person who worked for him or her . . . By2000, it was between 400 and 500 times, and last year I believe. . . it was about 530 times. There is no economic theory on God's planet that can justify that."

<snip>
Furthermore, it appears that shareholders and directors of companies that are performing poorly are reluctant to act. "A surprising number of companies continue to pay their executives stratospheric sums for mediocre performance" says Glass Lewis in its recent report on renumeration. "Some of America's highest-paid CEOs continue to manage some of the nation's worst performing companies."

The report says that Schering-Plough, the pharmaceutical company, is a good example of this phenomenon. In April 2003, the company lured Fred Hassan, a seasoned industry executive, to be its turnround architect. That year, the company recorded a $92m loss, yet Mr Hassan was paid for his part-year in cash, shares and options worth about $11m.

[kerry-is-my-prez]

9. Repub meme: "Well they deserve it." (But it's even CEO's of failing Co's)

So it is NOT a case of people being rewarded for doing a good job and/or doing a "tough" job. Most CEO's are nothing more than glorified PR agents in my experience with working at a large Corporation. They are basically "arm candy."

Have They No Shame?
Their performance stank last year, yet most CEOs got paid more than ever. Here's how they're getting away with it.
FORTUNE
Monday, April 14, 2003
By Jerry Useem
http://www.fortune.com/fortune/ceo/articles/0,15114,443051-3,00.html
But the pigs were so clever that they could think of a way round every difficulty.
--George Orwell, Animal Farm

Who says CEOs don't suffer along with the rest of us? As his company's stock slid 71% last year, one corporate chief saw his compensation fall 12%. Sure, he still earned $82 million, making him the second-highest-paid executive at an S&P 500 company in 2002, according to the 360 proxy statements that had rolled in as of April 9. And yeah, he's under indictment for the wholesale looting of his company, Tyco. But at least Dennis Kozlowski set a better example than the top-paid executive, who pulled in a whopping $136 million. That was Mark Swartz, his former CFO.

Unusual, you might say, for one company to produce the two top earners in a given year. But three of the top six? Now that's truly striking--especially since the other person isn't part of Kozlowski's gang at all. It's Ed Breen, the guy hired to clean up the mess.

You'd think that in the aftermath of a scandal that made Tyco a symbol of cartoonish greed, its board might want to make a point of frugality. Yet even as it was pressuring its former officers to "disgorge" their ill-gotten gains, it was letting its new man, who became CEO last July, gorge himself on $62 million worth of cash, stock, and other prizes. By all accounts Breen is doing a fine job so far (see Exorcism at Tyco), but still. And the gravy train didn't stop there. Tyco's board of directors dished out another $25 million for a new CFO, plus $25 million to a division head, putting them both on a par with the CEOs of Wal-Mart and General Electric. At least the company, now with a new board of directors, seems to recognize the need for some limits: Its bonus scheme "now caps out at 200% of base salary," notes Breen, "whereas before it was more like 600% or 700%."

That, in a nutshell, is what a year of unprecedented uproar and outrage can do. Before, CEOs had a shot at becoming very, very, very rich. Now they're likely to get only very, very rich. More likely, in fact. FORTUNE asked Equilar, an independent provider of compensation data, to analyze CEO compensation at 100 of the largest companies that had filed proxy statements for 2002. Their findings? Average CEO compensation dropped 23% in 2002, to $15.7 million, but that's mostly because the pay of a few mega-earners fell significantly. A more telling number--median compensation, or what the middle-of-the-road CEO earned--actually rose 14%, to $13.2 million. This in a year when the total return of the S&P 500 was down 22.1%.

-snip-

[BiggJawn]

11. So I'd be making 20 megabucks a year?

Just to say shit like:
"I had NO idea what the accountants under me were doing..."

"I don't know what's going on at this company, I'm just the CEO"

"I know NOZZEEN! I See NOZEEN! I hear NOZZEEN!"

What happened to that worker's Utopia we were heading for? Did Ronaldus Rex REALLY kill the whole thing when he killed PATCO?

[lovuian]

12. This is what caused the Great Depression

America's total wealth held by a few rich men

it took the nation down

[BrotherBuzz]

13. Does anyone have any idea what the ratio was in 1932?

How about 1928?

[Surf Cowboy]

14. These assholes are just gonna push it

until there actually IS a violent class war. I don't know what the fuck they are thinking. Does "Bastille Day" ring a bell? How 'bout "October Revolution?"

I'm not advocating such action, but at some point, people aren't going to sit for <1% of our population holding the rest down. And unfortunately for the rich, there's no gun control in this country, so it's not as if there will be a problem arming the poor.

If they don't start to be responsible, they'll probably force some sort of civil war.

[SoCalDem]

16. What was the spread in the "Golden Age" of the middle class..??

1950's & 60's.???

That was the era of the boss living in the same community as the workers..They had bigger houses and nicer cars, but they were not the "demi-gods" that CEO's are now..

[CrispyQ]

17. It's time to outsource those blood suckers!

[BrooklynRider]

18. If you have a 401K - you should speak out to the fund managers.

[in_cog_ni_to]

19. THAT'S OBSCENE!!!!!!!

How much money is enough money? I ask you. :grr:

[ComerPerro]

21. That is why the love Ray Gun so much.

Actually, that is why the rich, elitist snobs love Ray Gun. The rest of the reich wing loves him because, well, they are stupid and they have had people like Limbaugh and Hannity repeatedly drilling into their heads that Reagan was the greatest president ever.