Smart. Sharp. Funny. Fearless.
Wednesday, September 28, 2016

Corporations are obligated to disclose how much their CEOs earn compared to the average worker, thanks to Section 953(b) of the financial reforms of 2010 known as Dodd-Frank.

However, three years after that bill became law, some of the nation’s largest corporations are battling regulators to prevent such disclosure, according to Bloomberg.

“The fact that corporate executives wouldn’t want to display the number speaks volumes,” said Phil Angelides, who was the chairman of the Financial Crisis Inquiry Commission, which investigated the collapse that led to the Great Recession.

Angelides says that the attempt to block this provision is just one example of the “street-by-street, block-by-block fight” that corporations and Wall Street are waging against implementation of the modest reform package that passed only after it was weakened to garner Republican support in the Senate.

Groups including the American Insurance Association, Business Roundtable, National Investor Relations Institute, and the U.S. Chamber of Commerce have petitioned the Security and Exchange Commission (SEC), making the argument that “it is unclear how the pay ratio disclosure will be material for the reasonable investor when making investment decisions.” They claim that calculating such ratios is time consuming and almost impossible for multinational corporations.

Without obligated disclosure, there’s no clear way to assess CEO-to-worker ratio. In 2010, the Bureau of Labor Statistics reported large-company CEO compensation was 319 times the median worker’s pay. Currently the average multiple of CEOs to a typical worker is 204 — up 20 percent since 2009, according to statistics collected from workers’ compensation estimates.

Bloomberg‘s Elliot Blair Smith and Phil Kuntz point to Ron Johnson, the recently ousted CEO of J.C. Penney, who earned a whopping 1,795 times what a typical $8.30-an-hour JCP salesperson took home.

The AFL-CIO has been attempting to counter the corporate lobbying with an effort to make the SEC put in place what is already law.

“The impact of high levels of CEO pay on employee morale is particularly important in today’s weak economy, when workers are being asked to do more for less,” suggests an online petition it is circulating to pass on to the government regulators.

“Estimates by academics and trade-union groups put the number at 20-to-1 in the 1950s, rising to 42-to-1 in 1980 and 120-to-1 by 2000,” Smith and Kuntz write.

Even if corporations are forced to disclose how much their top executive is paid, there are a variety of ways for them to cloak compensation.

Still the Campaign for America’s future calls enforcing Section 953(b) a crucial test for new SEC chair Mary Jo White to find out if she’ll be a “watchdog or a lap dog for Wall Street.”

Photo: Matthew Knott via Flickr.com

 

 

  • The JC Penney CEO is not the only one that earns over 1,000 times more than the average employee in his/her company. The CEOs of WalMart, Target and other stores notorious for hiring part time workers, paying them miserly salaries, and no benefits are among those who earn inordinate high salaries and enjoy lavish benefit packages. Interestingly, when middle class workers complain about their unfair labor conditions, Republicans don’t hesitate to demonize unions and their members, blaming them for the, alleged, high cost of merchandise, food, housing and services in the USA. The problem is not the workers, or the unions, but the greedy CEOs, members of the Board, and shareholders whose focus starts and ends with how much money they can earn off the misery of others.
    The worst part of this issue is that most Americans take in stride and do absolutely nothing to demand change. It is almost as if we all believed the elite has the right to earn as much money as they wish, even when they perform substandard work, and the middle class and the poor deserve nothing and should be happy they are scraping a living.

    • middleclasstaxpayer

      You’re still falling for the Obama tactic of pitting the many against the few. WHO CARES what someone else earns? I’ve never earned more than $50K a year, but I don’t begrudge someone who works for, and earns more. Fact is, I treasured my family & free time MORE than working 18 hour days (and weekends) like many execs do. If they earn it, good for them. Free enterprise is what made the USA great…..take that incentive away, and we’ll be just like Cuba or North Korea. Stop envying others and work harder if you want more!!! If you can’t do that here, you can’t do it anywhere. That’s why foreigners come here without a cent, and thru hard work, gain success they never could gain in their home countries….it’s the American dream. WORK, not envy, wins out every time.

      • hjs3

        Now “if they earned-it” that’s something most of us would agree to
        BUT when these corporations cloak 90% of this executive restitution as “performance compensation” and pay no taxes to speak of that’s something else all together….

        • ococoob

          It’s something ELSE when some of these companies are NOT performing up to par!

      • The goal should not be to become a Cuba or North Korea, but to emulate the equality that exists in Northern European countries, Canada, Australia, New Zealand, Japan and other industrialized nations, where high performers and creative employees are rewarded, and lousy employees – including under performing CEOs – get the boot.
        It may surprise you to know that the performance of many CEOs does not justify that astronomical salaries they earn, while many of their employees – who are often the ones that contribute to the betterment of a corporation – are underpaid. This article is about the unfairness of a system that, purportedly, reward performance while in fact stifling the natural tendencies of the average American to work hard, be creative, and loyal to their employer.
        Bragging about making only $50K does not say much about your commitment to corporate growth, it does say a lot, however, about your commitment to family which is, by all measures, a lot more important than the materialism of the CEOs you are defending. If it was up to them we would be working in sweat shops like the one that burned down in Bangladesh, shopping at the company store, and you would not be making the modest salary you are earning, or the ability to enjoy your loved ones.
        BTW, this situation has existed since long before Barack Obama was born.

        • middleclasstaxpayer

          Your comment about giving the boot to lousy employees is correct, but in this age of “unions”, companies cannot get rid of “lousy employees.’ Our schools are a great example. Underperforming teachers that are nonetheless tenured are nearly impossible to shed, keeping a “lousy employee” on the job without justification. Same in government, where overpaid civil servants continue collecting their unjustified pay. And of course, in unionized private-sector jobs, the waste continues. Your example of European countries is also suspect, as many of these nations are on the brink of collapse because of requirements to provide months-long vacations to employees, the inability to fire anyone, etc. Many European countries WISH they had some of the things we here USED to have, but alas the world is changing quickly, and not for the better. It’s the SYSTEM of “workers rights” that is killing industries (and nations) world-wide.

          • 788eddie

            Dear middleclasstaxpayer: THe age of “unions” seems to have passed. Far fewer workers are protected by unions and collective bargaining today than in the past half-century. And that’s part of the problem. A weak economy and political maneuvering by Republican administrations in some states (e.g. Michigan) have given the bosses much more control.

          • idamag

            You are absolutely right. When the middle class (working class included) has money, they spend it and grow the economy. Corporations pay big money to professional lobbyist, but the working man is supposed to keep his place, where does he get off wanting representation in his government?

          • idamag

            Again you are sadly misinformed. This is not the age of Unions. Only 16 percent of the workers belong to a union and where does that blue collar worker get off, thinking he should have his own lobby group. After all, he is a peon.

          • sigrid28

            People who REALLY care about the well-being of their children should be very concerned about the realities behind the enormous and widening gap between executive compensation and workers’ pay and benefits. Republican talking points serve no purpose but to promote the status quo–and bore the rest of us silly.

          • middleclasstaxpayer

            What my boss (or the owner of my company) earns has absolutely NO relevance to my pay. I stated earlier that I never made more than $50K per year. What I did not mention was that others in my company with similar jobs sometimes made almost twice my pay. BUT, they were willing to do more…works nights & some weekends, travel a lot, give up free time & hobbies. I was UNWILLING to accept those sacrifices, so I earned less. Would I have liked the extra cash, OF COURSE. But I was unwilling to give up my time with family, kids, hobbies, etc. My boss made loads more then me, but he WORKED MORE FOR IT…a LOT MORE! Envy & greed will do you no good in life. If you’re not satisfied with your position, find something you are satisfied with.
            And STOP envying others. It’s like drinking poison!

          • BDC_57

            I see your still spreading fox fake news bull shit

          • sigrid28

            To recognize inequality is not to envy, as your Fox News mentors would like you to believe, so you will be content with the inadequate standard of living you get, while billionaires funding the GOP keep benefiting from tax breaks and loop holes for which only they qualify. The CEOs and top 2% who so out “earn” the rest of us are not the same as your fellow employees working more hours than you do to make twice as much. The $100,000-a-year salaries you do not begrudge other employees are NOTHING compared to the income of those in the top 2%. In the $100,000 bracket, families might own a fine home with twice as many bedrooms, bathrooms, and garages as yours. An equivalent for a 2% type would be a ten-story residence hall at your local state university, with his or her name on it, plus several more personal residences in the U.S. and abroad. They might put their pants on one leg at a time, same as you and me, but they are not wearing out their favorite pair of jeans because they have no other choice. If having this 2% pay a little bit higher tax on unearned income so their tax rate is not half that of their administrative assistants, would allow local, state, and federal government to improve infrastructure, which benefits us all–even the 2%–while creating thousands of new jobs, what in the world is toxic about that!

          • middleclasstaxpayer

            You’ve missed the point completely…if you want to compare yourself with others, try making the comparison with those BELOW you on he economic scale….and even then, the “poor” in the country still get housing subsidies, food stamps, aid to dependent children, and I’d guess a FREE cell phone??? I am not envious of those above me…my family lives within our means and we are happy….if all you do is envy others who you perceive are “above” you, you will be miserable in life. Try counting your blessings instead of complaining you glass is “half empty.”

          • plc97477

            You at least had the option to do your job as you saw fit. Not everyone seems to have that option

          • middleclasstaxpayer

            I earned that right, not by being the most aggressive worker, but simply by being reliable, dependable & on time for all meetings & appts. And by trying to be agreeable whenever possible. You’d be surprised how many didn’t even do that.

          • plc97477

            Are you saying that employees shouldn’t have the right to ask for safety in the work place? Shouldn’t have any say in how their job is done or how they are compensated? sounds a little like slavery to me.

          • middleclasstaxpayer

            Having a say in job safety & so on is a totally different story from getting paid what you’re worth. I would love to earn more, have a bigger home & a newer car, but I am UNWILLING to sacrifice my personal & family time for extra cash. We simply do with a little less. No complaints, that’s the way we like it.

        • plc97477

          Great post. One change though, the sweatshop in Bangladesh collapsed not burned down.

      • idamag

        You are not exactly an objective observer. For your information people do not envy money. If that is someone’s obsession – so be it. To simplify: let us say that there is only $100 in existence for 10 people. No more money exists. If 1 of those people has 40 dollars, that means nine people have to share the remaining 60 dollars and it doesn’t meet their needs. Let us say that the 1 person gets hold of the 40 dollars by speculating and betting on hedge funds while the remaining 9 people are those who provide services and goods to the 10 people. It is the people who WORK who is getting shafted.

      • sigrid28

        What would be so wrong with these companies who compensate their CEOs so handsomely paying a living–rather than a minimum–wage?

        • plc97477

          And if there is a way (they will find it) to pay less they will.

    • middleclasstaxpayer

      Since you cite the Wal Mart CEO as earning an inordinate salary, lets look at that. CEO Mike Duke was paid $18.1 Million dollars in 2012…way too much you say. If he divided his ENTIRE $18.1 Million to his 2,100,000 Wal Mart employees, EACH employee would get $8.57 EXTRA for the year. If the CEO instead gave his entire salary of $18.1 Million to the US government, each of us 360 Million citizens would reap 5 CENTS more a year! As you can see, even if we lumped ALL the supposedly overpaid execs together, it would mean PEANUTS to the average citizen. I suggest you find something else to complain about, as CEO salaries are basically a non-issue as far as we are concerned.

  • oldtack

    To see how far this Country has digressed go to google and type in Haymarket Riots, Pullman Strike – 1880’s then follow on through UAW, Coal miners – find out the origin of “Red Neck” and total up how many Miners were ambushed and murdered at the behest of the Owners.

    I grew up in a Southern Mill Village. For the un-informed – a Mill Village was that accumulation of sub-standard houses clustered on unpaved streets behind the Textile Mill. This was where the workers lived. My Grandmother died at the age of 24 from “lung fever” from breathing in cotton lint in a Mill in Alabama. She and her siblings had worked there from the age of 12. Because they didn’t want to go to school? No-because it took all of their meager earnings just to help the family survive.

    We had very little to eat – usually milk gravy and bisquits for breakfast, Beans, fried potatoes and cornbread for dinner and many nights we had only mush with butter,salt and pepper for supper. Again for the uninformed – mush is cornmeal boiled in water with a small piece of fatback.
    My Dad died in 1957 at the age of 64 on the back dock of the Mill. He worked 10 hours a night six nights a week. 60 hours weekly for a grand wage of 93 cents an hour with zero benefits.

    If the workers of this Country do not unite in Solidarity we all will find ourselves back in the time of the 1880’s .

    • 788eddie

      It’s scary to consider, but the fuse may already be lit.

    • Susan Dean

      Thanks for reminding us how workers in the past have struggled. It’s time for us to follow the paths that won decent jobs in the 50s through the 70s. Just who are these corporations that are breaking the law by not revealing executive compensation? We need a list, and we need to boycott them.

      • TZToronto

        How about the government demanding that these companies fork over the numbers? It’s no great task to determine how much the average worker is making. (It’s only a bit more complicated to figure out what the C-level people are making.) They don’t want to do it because they’ve off-shored so many jobs that the average wage for the company is probably well below the minimum wage in the U.S. So the CEO may be making thousands of times what the “average” worker is making. That’s misleading, I suppose, but too bad. Obey the law!! (Corporations are people, or so I’ve been led to believe, and people have to obey the law!)

    • robertblair3174

      The labor movement in the United States has a long, and proud history.
      It has unfortunately become (IMO) a victim of its own successes.
      Due to the union’s involvement in the disciplinary process, it is perceived on the shop floor as only caring about the lazy, or the undeserving employee, not the average worker.
      The economic gains made in union contracts has been spun as “Union Greed” by management, causing resentment by workers in non union work places, and resulting in backlash against union workers simply demanding a fair pay rate for their labor.
      Even union solidarity has taken a hit. As companies have taken tougher, and tougher negotiating stances, new hires are getting thrown under the bus in new contracts to hold on to the status-quo for older employees.
      Can we overcome these issues? I don’t know. Maybe a re-vitalization needs to happen, starting with the rank, and file on the shop floor. I do agree with you that as Organized labor is facing some of the most difficult times in it’s history, America (and Americans) have never needed it more

  • Pamby50

    Mr Johnson received a 53 million dollar parachute for doing a bad job. During the same time JC Penney let go 43,000 employees. I wonder if those 43,000 people received a golden parachute like this CEO. Not.

  • ralphkr

    I am all for people getting bonuses for outstanding work whether they are the janitor or the CEO but I am appalled by the many CEO’s that get mulit-million dollar bonuses after practically driving the company into the ground. I am sure that if the US passed a law mandating that no one can be paid more than 40 or 50 times what the front line worker is paid then we would see massive pay raises for the front line workers. Of course, that would have little or no effect upon businesses such as vulture capitalists or hedge funds where the starting pay is apparently in excess of a million a year.

  • adriancrutch

    Mary jo White looks the lap type! She jump right back into the bank lawyering job when she leaves! THANKS OBAMA!

  • bcarreiro

    their p&l shows what they are pocketing and the more they make is because of their unappreciated employees working hard all day for a little more than the minimum.. its called Corruption!!! transparency is the key to clarity.