In an article, "Confronting excessive executive compensation," in the San Diego Union-Tribune, the authors wrote:
"Viewed in comparison with worker earnings, the ratio of executive pay to average worker pay went from
24:1 in 1965, to
42:1 in 1980, and to
364:1 in 2006.
"The absolute amounts involved are staggering, and the circumstances under which they are sometimes earned are mystifying:
"Carly Fiorina, Hewlett Packard chief executive, took with her $42 million when she was forced out by the company for failing to deliver on profits. Her replacement, Mark Hurd, was promised an annual salary of $20 million-plus, and given a golden “hello” of $20 million. Philip Purcell, CEO of Morgan Stanley, walked away with $113 million when he was forced out. Some hedge fund managers have made more than $500 million year after year."
In 2005, Rick Wagoner, CEO of General Motors, received $8.5 million in salary, bonuses, and "other" compensation. If the average (wage + health benefits, etc.) of a UAW employee as reported by the Indianapolis Star and National Review is $150,000 (!! It is most assuredly not, but possibly as much as $60,000 including all perks) -- even if it were $150,000, then the ratio of the CEO's salary to that huge annual wage would be 56.67/1 -- a great deal more than the 42:1 ration of 1980 and the 24:1 ratio of 1960.
Many people -- Tom Friedman of the NY Times, who seems to have a thing about living wages for working people, squawks the loudest -- say that wages paid to American auto workers (and other workers, for that matter, who make a lot less) are "excessive" and keep American manufacturers from being "competitive." Those critics say the wage of the union boys ought to be knocked down closer to the minimum wage, that they "tighten their belts" etc.
How does paying executives on the average 364 times the wage of their employees make these corporations competitive? (Hint: it doesn't.)
Mr. Wagoner, along with Messrs. Robert Nardelli of Chrysler and Alan Mullaly of Ford, were sent away from the Senate the other day -- each in his own corporate jet -- with the homework assignment of preparing a plan for the use of the $25 billion bailout money they asked for and didn't receive just yet.
Could there be the possibility that THEY -- not just the auto workers -- could take just a little pay cut? Just on the outside chance that they won't say anything about themselves taking a cut -- it's dollars to doughnuts they won't -- then it would be courageous and patriotic of Congress to make legislation mandating that top executives' ratio of pay to their workers' pay be dropped from 364:1 to a level somewhat less enormous; that it be tied to the results they get, which include making vehicles that pollute less, get better mileage, include more hybrids; that it also be tied to not closing plants and moving them to overseas sweatshops.
What's expected of American workers, union and non-union, ought to be expected of American top bosses.
1 comment:
I'll bet old J. I. Miller is rolling in his grave. These guys are making more money in one year than he ever had accumulated, I suspect. The boys on George S. were not to kind to the automaker "big whigs" this morning and it was rather humorous. It is about time that they all get exposed but of course they have already gotten away with the loot. The only way they will suffer is with their stocks--I hope a lot of what they got was stock options. Can you hear me laughing?
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