Top corporate executive compensation continues to soar substantially above that of those who work under them, according to a new Economic Policy Institute (EPI) report.
When the value of stock options sold is included, EPI found that U.S. CEOs at the top 350 firms made an average of $15.6 million in 2016, some 271 times more than typical worker. CEO pay without including cashed-in stock options stood at $13 million.
“CEO pay drives up compensation for other executives, and is a major driver of inequality,” EPI President Lawrence Mishel said. “Simply put, money that goes to the executive class is money that does not go to other people. Rising executive pay is not connected to overall growth in the economic pie. We could curtail the explosive growth in CEO pay without doing any harm to the economy.”
CEOs even made 5.33 times more than the average worker in the top 0.1 percent of wage earners, EPI stated. If these corporate leaders made less or were taxed more, it would not adversely affect output or employment.
The fight against excessive CEO pay is a fight the Teamsters know well. For years, the union has decried the disproportionate pay between those at the top of the corporate structure and those who actually do the work that makes the firm profitable. But it has taken on added meaning recently as one of the nation’s richest CEOs continues to collect substantial payment while his company gets punished by the U.S. Justice Department for the role the company played in failing to report suspicious opioid orders.
The pay package for McKesson CEO John Hammergren, long criticized by the Teamsters, was recently questioned by The New York Times. “But what about managers who take home bounties amid leadership failures that harm other stakeholders?” the article asked. “Should shareholders give these executives a pass because the company’s stock price rose on their watch?”
The union has taken Hammergren to task for continuing to rake in one of the highest compensation packages in the nation at the same time McKesson is being called out for its role in an opioid crisis that costs the lives of more than 90 people in this country each day. The company’s behavior as part of the epidemic was recently featured in the Teamster Nation Podcast. And Teamsters are on hand in suburban Dallas today criticizing Hammergren and the company for their actions.
Companies need to be called to the carpet for their continued support of sky-high salaries of their top brass, even when it’s clear they are up to know good. One of the ways to do so would be to allow greater use of “say on pay,” which allows corporate shareholders to vote on top executives’ pay. The Teamsters have become staunch believers in such provisions.
CEOs must be held accountable. Doing so just won’t help their employees, but the public at large as well.