{"id":239268,"date":"2023-07-17T12:00:30","date_gmt":"2023-07-17T11:00:30","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=239268"},"modified":"2025-01-10T15:06:03","modified_gmt":"2025-01-10T15:06:03","slug":"executive-pay-a-good-years-pay-for-a-good-days-work","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2023\/07\/executive-pay-a-good-years-pay-for-a-good-days-work\/","title":{"rendered":"Executive Pay: A Good Year\u2019s Pay for a Good Day\u2019s Work?"},"content":{"rendered":"

Pay levels for top U.S. corporate execs have lost any connection to organizational rationality.<\/em><\/p><\/blockquote>\n

\"\"<\/a><\/p>\n

9 Jul 2023 – <\/em>Can you imagine a president of the United States proposing a federal budget that quadruples the paychecks that go to top federal officials? Of course not. No president would dare risk wandering down that road. America\u2019s taxpayers, our top pols understand, have a distinct aversion to seeing anyone get rich off their tax dollars.<\/p>\n

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Pay rates for top executives within the federal government reflect that aversion. The U.S. Department of Health and Human Services has, for instance, over 80,000 employees, and the work these employees do can literally make the difference between life and death for millions of people the world over. Yet the top executive at HHS, Xavier Becerra, last year took home<\/a> less than $250,000 in compensation.<\/p>\n

Within Corporate America\u2019s top executive suites, by contrast, $250,000 wouldn\u2019t even rate as a decent paycheck for a mere week\u2019s worth of labor. Last year\u2019s highest-paid U.S. CEOs pocketed<\/a> over $250,000 per day<\/em>.<\/p>\n

Should we care about these astounding sums now filling the pockets of our top corporate execs? We sure should. Unlike cabinet secretaries like Xavier Becerra, corporate execs are<\/em> getting rich off our tax dollars. Large numbers of these execs are either running corporations with massive federal contracts or annually raking in fistfuls of federal subsidies.<\/p>\n

Need some specifics? Consider the pharmaceutical industry and the race against Covid. Back in 2012, notes<\/a> a just-published Fierce Pharma<\/em> analysis, five biopharma CEOs pocketed<\/a> over $18 million in annual compensation. Last year, biopharma\u2019s 15 highest-paid execs all took home at least $19 million. Their ranks included the CEOs at the two most prominent Covid vaccine firms: Pfizer\u2019s Albert Bourla and Moderna\u2019s Stefane Bancel. In 2022, their paychecks together totaled over $52 million.<\/p>\n

What did execs like these two CEOs do to reap their immense windfalls? They surfed a Covid wave of tax dollars. That wave enabled their personal \u201csuccess.\u201d Notes<\/a> a Health Affairs<\/em> journal analysis: \u201cThe government invested extensively in every aspect of the basic science, preclinical development, and clinical trials for the vaccines.\u201d Tax dollars even \u201creduced manufacturing risk by underwriting capacity investments.\u201d<\/p>\n

Overall, as data from the People\u2019s Vaccine Alliance would show<\/a>, the \u201cexcessive profits\u201d Big Pharma giants made off Covid vaccines created \u201cat least\u201d nine new billion-dollar fortunes in the pandemic\u2019s first year alone.<\/p>\n

We have, unfortunately, learned little in the way of lessons from our Covid experience. Our tax dollars, a new study<\/a> from Good Jobs First indicates, are now turbocharging supersized climate-change fortunes.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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The just-released Good Jobs First analysis \u2014 Power Outrage: Will Heavily Subsidized Battery Factories Generate Substandard Jobs?<\/em> \u2014 examines a little-known provision in the 2022 Inflation Reduction Act that may end up costing U.S. taxpayers more than $200 billion over the next decade, a sum above and beyond the $13 billion that state and local governments have promised as battery incentives.<\/p>\n

Lawmakers see all those billions of tax dollars as a generator of good wages, but nothing in the battery subsidy fine-print mandates \u2014 or even incentivizes \u2014 decent worker paychecks. Ford Motor, for instance, will be eligible for $6.7 billion in federal subsidies for its new $3.5-billion battery plant in Michigan, and state and local officials have already handed Ford $1.7 billion for that plant.<\/p>\n

How does that math play out for real-life workers?<\/p>\n

\u201cThe company has promised to create 2,500 new jobs that it says will pay an average annual wage of just $45,000 a year,\u201d Good Jobs First points out, \u201cwhile reaping subsidies of $3.4 million per job.\u201d<\/p>\n

The Good Jobs First study offers a variety of policy proposals \u201cto set the country\u2019s emerging EV-battery industrial complex on the path to \u2018high road\u2019 employment,\u201d steps ranging from requiring subsidy recipients to pay wages that at least match the local market rate to including contract provisions that \u201cclaw back\u201d tax-dollar subsidies should companies fail to deliver the jobs they\u2019ve promised.<\/p>\n

Will steps like these be enough to ensure that the benefits of the transition to electric vehicles get \u201cjustly shared,\u201d as the Good Jobs First report puts it, \u201cwith the workers and communities building America\u2019s fossil-free economy\u201d? Not unless we also take steps that meaningfully discourage any attempts by top corporate execs to grab much more than their \u201cfair share\u201d of federal tax dollars.<\/p>\n

How could we do that discouraging? We could include in every government contract and subsidy provisions that deny public tax dollars to firms that compensate their top execs at over 25 or 50 times the compensation that goes to their workers.<\/p>\n

A bit of historical perspective: Back in the mid-20th century, few corporate chiefs pocketed over 20 times the annual compensation of their average workers. CEOs at major U.S. corporations, the Economic Policy Institute reported<\/a> last fall, are now averaging nearly 400 times<\/em> worker annual pay.<\/p>\n

If we shifted gears and only extended taxpayer-funded contracts and subsidies to corporations that limited their CEO pay to no more than 25 or 50 times worker pay, top execs at companies that get our tax dollars would have an ever-present incentive to raise their worker pay, not squeeze it.<\/p>\n

Two municipalities, Portland and San Francisco, have already taken steps in that direction. State and federal lawmakers have introduced similar proposals, as this Inequality.org CEO-Worker Pay Resource<\/em> Guide<\/em> details<\/a>.<\/p>\n

We clearly can create a more equal United States. Corporate paychecks could lead the way.<\/p>\n

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Sam Pizzigati co-edits <\/em>Inequality.org. His latest books include <\/em>The Case for a Maximum Wage<\/a> and <\/em>The Rich Don\u2019t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970<\/a>.<\/p>\n

Go to Original – inequality.org<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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