A CEO’s Pay Is 364 Times of a Worker’s Pay;
Are You Angry? What Will You Do About It?

The chief executive officer (CEO) of a Standard & Poor’s 500 company made an average $14.2 million in total compensation in 2007, despite the heavy losses sustained by many of the companies in the collapse of the mortgage market. The CEOs of large U.S. companies averaged $10.8 million in total compensation in 2006, more than 364 times the pay of the average U.S. worker, according to the latest survey by the United for a Fair Economy.

What does the AFL-CIO’s “Pay Watch” hope to accomplish by regularly posting the outrageous salaries, bonuses and stock options of top executives? To expose them as greedy? To make them so ashamed of their annual earnings that they’ll ask for a few million less when profits are distributed? On the contrary, CEOs strive for even bigger salaries and the power it gives them in the corporate world.

CEOs have some smart talking points that many workers tend to accept. They say they are successful examples of American individualism and the competitive spirit that has made our country the greatest in the world. They get their multimillion-dollar packages, because companies are willing to pay them that much for their services. They gain their position by attaining celebrity status in the corporate job market. They are achieving their true potential at the highest level, the dream of most people. CEOs, they say, should be admired, not reviled.

What about the workers? Of course, they are resentful. They are enraged at the thought that a CEO would be paid 364 times that of a worker. But what have they done about it? Union leaders do not challenge the right of employers to sole ownership of a company, despite the fact that it’s the labor of workers that has made it profitable.

It’s largely accepted that workers are under the control of their employer from the minute they step into the workplace and are assigned to a job. It’s also understood that employers have the authority to fire them for whatever reason or no reason at all. That’s how the economic game is played, and the federal government, whether controlled by Democrats or Republicans, is there to enforce it.

A Bill to Give Shareholders a Non-Binding Vote on Executive Pay

Senator Barack Obama, the Democratic Party presidential candidate, has introduced a bill in the Senate (S. 1181) requiring publicly-owned companies to submit executive pay plans to a non-binding shareholder vote each year. It is most unlikely that Congress will even consider, much less approve it, because, realistically, lawmakers won’t attack influential corporate executives on whom they depend for big political donations.

Historically, most company shareholders, while perhaps grumbling, do not oppose the pay recommendations of their boards of directors. Neither the public nor organized labor is paying much attention to corporate executive pay as a pressing issue. At best, it is a non-binding measure, allowing companies to ignore it. The proposed legislation is little more than a cover-up for not changing the status quo. It still leaves workers in a servile position, subject to the whims of their employers.

But what if those 364 workers told their CEO they would stop production unless they received at least an equal voice in the company’s policies and operations and in the distribution of company profits? Is there any union that would make such a demand? Is there any labor leader that would even suggest it? What would happen if they did?

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