How Much Is A Boss Worth?
An poor lot of Americans are skeptical approximately the value of their nation’s corporate executives.
As a 2016 nationwide survey reveals, 74 percent of Americans believe that top corporate executives are overpaid. This public dismay with CEO compensation exists despite the fact that Americans drastically underestimate what top corporate executives are paid every year. In fact, the survey found that CEO compensation at Fortune 500 companies was approximately ten times what the typical American thought it was.
What are these CEOs actually paid? According to a study for the Associated Press by the executive data firm Equilar, in 2016 the typical CEO at the S&P 500 companies received $11.5 million in salary, stock, and other compensation.
Of course, this was the median CEO income. Some were paid a noteworthy deal more. Thomas Rutledge (structure Communications Inc.) received $98 million during 2016; Leslie Moonves (CBS Corp.) $68.6 million; Robert Iger (Walt Disney Co.) $41 million; and David Zaslav (Discovery Communications Inc.) $37.2 million. A few CEOs didn’t effect the list because, as fantastically wealthy commerce, trade owners (like Jeff Bezos and ticket Zuckerberg, collectively worth $146 billion), they didn’t bother taking a salary from their companies.
CEO income during 2016 reflected substantial increases over the preceding year, with the typical CEO getting an 8.5 percent raise. Some, particularly the best-paid, received far more. Rutledge received a raise of 499 percent, while Moonves’s pay rose by 22 percent.
American workers haven’t been doing nearly as well. According to the AFL-CIO (which estimated average corporate CEO pay in 2016 at $13.1 million), the average production or other nonsupervisory worker earned only $37,632 that year. Thus, in 2016, there was a CEO-to-worker pay ratio of 347-to-1.
This gap between CEO and worker pay has been widening considerably over the years. In the 1950s, the S&P 500 CEO-to-worker pay ratio was 20-to-1. Even as late as 1980, it was 42-to-1. But the rise of the political Right, the adoption of pro-corporate public policies, and the decline of union strength fill led to a situation in which the average CEO of America’s largest corporations has an annual income 347 times that of the average worker. In the final five years alone, corporate CEOs received percentage pay increases nearly double that of the U.S. workforce.
This huge, immense and rapidly growing economic inequality between bosses and workers can certainly be challenged on the basis of social justice. Why, after everything, should roughly 20 million Americans, working at full-time jobs (and, sometimes, two or three jobs), receive such pitiful incomes that they are forced to rely on food stamps and other forms of public assistance while their CEOs grow ever wealthier and indulge in an opulent lifestyle once limited to kings and princes?
In addition, are these extravagantly-paid corporate CEOs producing commensurate value for their companies? According to a detailed 2016 study by MSCI, an investment and corporate research firm, businesses that if their CEOs with higher incomes delivered smaller financial returns to investors than did companies with lower compensation for their top executives. Favorably impressed by the study, a Forbes columnist concluded that “perhaps, possibly it is time to rethink and restructure CEO compensation.” Indeed, some corporate boards fill begun doing just that.
Although most Americans attain not serve on the boards of major corporations, they attain support sharp reductions in CEO compensation and other means of fostering greater economic equality. Indeed, a recent survey has found that a typical American favors limiting CEO pay to no more than six times the pay of the average worker. Furthermore, polls fill found that most Americans support increasing taxes on the rich and considerably raising the pathetic federal minimum wage, long stuck at $7.25 per hour.
Against this backdrop, it’s striking that the Republicans controlling Congress and the White House champion huge tax cuts for the wealthy and oppose any increase in the minimum wage. But, in this case, as in so much of American politics, he who pays the piper calls the tune.
The Morning Email
Wake up to the day’s most distinguished news.