Executive PayWatch:
CEOs get big raises,
hoard cash reserves
WASHINGTON, D.C. — Corporate
executive officers of S&P 500 Index
companies received an average of $12.9
million in pay in 2011 — a 14 percent
raise, according to data released April 19
by the national AFL-CIO. The ratio of
CEO to worker pay is now 380 to 1.
This information and more can be
found at the newly designed web site —
Executive PayWatch. The searchable
online database provides direct compar-
ison of top CEO pay to average wages
of workers, such as a nurse, teacher, fire-
fighter and others. To see it, go to
www.aflcio.org/CorporateWatch/CEO-
Pay-and-the-99.
AFL-CIO President Richard Trumka
noted that this is the second straight year
CEO pay increased, following the 23
percent increase in 2010. In stark con-
trast, the average wage for workers was
about $34,000 — a 2.8 percent increase
that barely keeps up with inflation.
“Astronomical CEO pay is based on
the false idea that the success of a cor-
poration is due to one CEO genius,”
Trumka said. “In reality, all employees
create value, and CEO pay levels
should be more in line with the rest of
their company’s employee pay struc-
ture. CEOs should be paid as a member
of a team, not as a superstar. The further
widening gap between CEO-to-worker
pay to an astonishing 380 times is sim-
ply bad for our economy.”
Trumka also pointed to new features
on PayWatch, including data exposing
swelling corporate cash stockpiles. That
cash level has reached a record $2.2 tril-
lion for U.S. corporations and another
$1.5 trillion for banks in excess re-
serves. The site highlights companies
with the highest cash hoards that have
cut jobs such as Verizon Communica-
PAGE 12
tions whose cash holdings and short-
term investments grew 311 percent to
$14 billion between 2007 and 2011.
During that period, the company
thinned its employment rolls by 17.5
percent.
“The egregious corporate behavior
today goes beyond the enormous levels
of compensation for CEOs and glaring
inequality in pay for their workers.
CEOs are simply hoarding their com-
pany’s cash rather than investing capital
to grow our economy and create jobs,”
said Trumka.
For the first time, PayWatch includes
a new database of mutual fund voting
on “say-on-pay” and other executive
compensation issues. Visitors to the
website can learn which mutual funds
are “pay enablers” verses “pay con-
strainers” and write their mutual funds
to encourage more votes against run-
away CEO pay.
PayWatch also examines the world
of private equity executive pay, an area
that has operated in the shadows until
the Republican presidential primary
campaign began raising more serious
questions about its practices.
The AFL-CIO launched the site two
days after a massive day of mobilization
where working people across the coun-
try called for a fairer tax structure and
for millionaires to pay their fair share.
Visitors to the PayWatch website
will be empowered to write the Securi-
ties and Exchange Commission and
urge them to implement the Dodd-
Frank Act’s requirement that public
companies disclose their ratio of CEO-
to-worker pay. Trumka said the AFL-
CIO campaign will work hard to defend
and further implement this historic re-
form.
As Union Membership Rates Decrease, Middle Class Share
of Income Shrinks and Top 1 Percent Incomes Explode
One of the chief drivers of American income inequality is the
decline of unions. According to a policy brief by the Center for
American Progress, the middle class’s share of national
income has steadily declined as the percentage of the
population in labor unions has fallen. At the same time, the
top 1 percent’s share of national income has exploded. Strong
NORTHWEST LABOR PRESS
unions have traditionally been the free-market solution to
income inequality, allowing people to get higher salaries
without government intervention. Unionization has allowed
middle class and working-class Americans to have the ability
to bargain for stronger wages and benefits and a larger share
of national income.
MAY 4, 2012