By Sahid Fawaz
Federally required disclosures of CEO-employee pay ratios are giving Americans a startling look at just how obscene CEO pay has become.
The Guardian reports:
“The CEO of Marathon Petroleum, Gary Heminger, took home an astonishing 935 times more pay than his typical employee in 2017. In other words, one of Marathon’s gas station workers would have to toil more than nine centuries to make as much as Heminger grabbed in just one year.
Employees of at least five other US firms would have to work even longer – more than a millennium – to catch up with their top bosses. These companies include the auto parts maker Aptiv (CEO-worker pay ratio: 2,526 to 1), the temp agency Manpower (2,483 to 1), amusement park owner Six Flags (1,920 to 1), Del Monte Produce (1,465 to 1), and apparel maker VF (1,353 to 1).
These revelations come thanks to a new federal regulation that requires publicly traded US corporations to disclose, for the first time ever, how much their chief executives are making compared with their median workers. The disclosures are just now starting to flow in.
Up until this year, comparisons of CEO and worker pay have had to rely on the average take-homes of US workers overall – not the pay of workers at individual corporations. Those generalized figures helped us track the soaring trajectory of executive compensation at big US corporations, from 30 times average worker pay in the 1960s to over 300 times more recently.
But headlines around those average figures did next to nothing to slow our CEO pay-hike express. Will the release of the ratios at individual corporations make any more of a difference?
Corporate America must surely think so. Ever since 2010, the year Congress plugged a ratio disclosure mandate into the Dodd-Frank financial reform act, corporate lobbyists have been scheming to delay and repeal that mandate’s implementation. But responsible investors and other activists rallied and kept the mandate in place.
The new ratios offer a benchmark for corporate greed that exposes exactly which firms are sharing the wealth their employees create and which aren’t, knowledge we can use to impose consequences on the corporations doing the most to make the United States more unequal.
What sort of consequences?
In Oregon, the city of Portland has adopted what the economist Branko Milanović has labeled ‘the first tax that targets inequality as such.’ Portland’s new levy imposes a 10% business tax surcharge on companies with top execs making over 100 times their median worker pay – and a 20% surcharge on firms with pay gaps that stretch past 250 times.
City officials in San Francisco are bringing a similar measure before voters this November. At the state level, lawmakers in Minnesota, Rhode Island, Connecticut, Illinois, and Massachusetts are getting into the pay-ratio tax act as well.
In California, a state senate bill that took the same approach nearly passed. The key sponsor of that measure, Mark DeSaulnier, now sits in Congress, where he’s co-sponsoring a like-minded federal bill.”
For the rest of the story, visit The Guardian here.