NEW YORK (PAI) – At most major U.S. corporations, the Wall Street Journal‘s annual CEO pay report announced, top executive compensation “is rising moderately.” Median chief executive pay, the Journal notes, only rose 5.5 percent in 2013.
In isolation, we suppose, 5.5 percent might indeed qualify as a “moderate” number. But isolation doesn’t really work here. America’s typical CEOs took home over $10 million in 2013. That “moderate” 5.5 percent pay hike they gained added nearly $600,000 into their pockets, more money than many working Americans get to collect from an entire lifetime of labor.
For the record, overall private sector wages and salaries rose just 1.8 percent last year. Also for the record: The Journal pay survey only covers the top 300 U.S. companies by revenue. Left out: Some of the year’s most lavish jackpots, including the $141.6 million that went to Cheniere Energy CEO Charif Souki.
The Journal wasn’t the only news organization to report on executive pay. So did the Associated Press, the worldwide news service. And both, of course, lagged almost two months behind the AFL-CIO’s Executive Paywatch and its comprehensive pay survey.
But all seem to have wound up with the same conclusions. The AP looked at top exec compensation at 337 major U.S. corporations that have had the same CEO in charge over the last two years. The median – most typical – pay at those companies in 2013: An all-time AP record $10.5 million, up 8.8 percent over 2012.
CEOs, the AP adds, are now taking home more in a single year than the average American worker can earn in 257 years. Chief executive compensation in the United States, corporate governance analyst Gary Hewitt told the AP, has “spun out of control.”
How out of control? Consider Steve Ballmer, former Harvard dorm mate of Microsoft co-founder Bill Gates. Ballmer stepped down as Microsoft’s chief exec this past February after a thoroughly uninspired 14-year tenure. How uninspired? A Forbes business commentator two years ago dubbed Ballmer the “worst CEO of a large publicly traded American company.”
Balmer survived that “worst” tag quite comfortably. His current net worth: $20 billion. His assets will soon include pro basketball’s Los Angeles Clippers. He cut a deal to pay $2 billion for the franchise, about four times the highest previous price for a pro basketball team.
Balmer’s basketball buy fits a pattern: Many of America’s super rich, Vanity Fair‘s A.S. Gill notes in a new essay, wrestle these days with a wrenching new malady. His label for it: “perfection anxiety.”
If you already have a half-dozen homes and yachts floating on every ocean, Gill observes, you don’t need more. You don’t even need better. You need the best.
For our wealthiest, adds Gill, the ongoing maintenance of this “best” can become a never-ending source of discontent: “A crooked Picasso, an unplumped scatter cushion, a faint mark on the handwoven silk wallpaper can drive them to a frothing distraction.” That froth can make our richest less than pleasant company. As one elite art dealer told Gill: “If you want to know what God thinks of money, look at the people he gives it to.”
McDonald’s CEO Don Thompson, just like his corporate colleagues in the Walton (Wal-Mart) clan, illustrate the flip side of being “the best”: They build their megamillions by exploiting and enslaving their workers – and then don’t get it when anybody objects.
Last month, at McDonald’s annual shareholders meeting, demonstrators protested both outside and in, calling for a $15 corporate-wide minimum wage at McDonald’s – the company currently pays on average between $7.13 and $8.84 an hour – and an end to Mickey D’s “predatory” marketing of unhealthy food to kids. More than 100 people were arrested outside.
Inside, Thompson insisted to shareholders: “We pay fair and competitive wages.” Competitive for Thompson, certainly. He pulled in $9.5 million last year. And as for that unhealthy food charge, Thompson had a ready answer: “My parents eat McDonald’s,” he explained, and “they are quite healthy.”
But there is hope in the battle over executive pay, even if the conflict sometimes seems one-step-forward-one-step-back or David vs. Goliath. (David won, remember?)
On the California State Senate floor last month, landmark legislation that would have upped the corporate tax rate on companies that pay their top execs over 25 times what they pay their workers came up just two votes short, falling to a narrow 19-17 defeat. Meanwhile, a new battleground is opening up in California’s executive pay wars.
Union activists in the state are collecting signatures to place on this November’s ballot an initiative that would limit annual CEO compensation in California’s huge “nonprofit” hospital empires to $450,000, the same salary as the president of the United States. In one recent fiscal year, the chief exec at the Oakland-based Kaiser Permanente took home $6.7 million. A mere $4.6 million went to his rival at the San Francisco-based Blue Shield of America.
In early June, the Rhode Island State Senate voted to give a preference on state contracts to firms that pay their top execs less than 32 times their lowest worker pay. The prime mover behind the vote, State Sen. Catherine Cool Rumsey, calls the 32-times link “a statement of our values.” State contracts, she explains, shouldn’t be rewarding firms that pay workers poorly and CEOs excessively.
No state legislative chamber has ever before opted to place consequences on CEO-worker pay gaps. Could this idea spread? Could we see a new movement to leverage the power of the public purse against the corporate pay policies that do so much to leave us more unequal? Too Much will keep you posted.
Veteran labor journalist Sam Pizzigati edits Too Much, a weekly journal sponsored by the Institute for Policy Studies about wealth and inequality. E-mail: email@example.com