Report from Huffington Post, 04/30/2013
We’ve made progress on a lot of things since the 1950s and so have CEOs — in their quest for more money that is.
The ratio of CEO-to-worker pay has increased 1,000 percent since 1950, according to data from Bloomberg. Today Fortune 500 CEOs make 204 times regular workers on average, Bloomberg found. The ratio is up from 120-to-1 in 2000, 42-to-1 in 1980 and 20-to-1 in 1950.
“When CEOs switched from asking the question of ‘how much is enough’ to ‘how much can I get,’ investor capital and executive talent started scrapping like hyenas for every morsel,” Roger Martin, dean of the University of Toronto’s Rotman School of Management, told Bloomberg.
The findings come just one day after the S&P 500 soared to a new record, indicating that perhaps the only ones not reaping the benefits from the companies’ historic profitability are workers. Other reports have come to similar conclusions. An analysis from the AFL-CIO, the umbrella organization for many of America’s unions, found earlier this month that CEO pay was 354 times that of the average employee.
The Dodd-Frank financial reform law aimed to make it easier for the public to know how much CEOs are getting paid in comparison to their workers. The law includes a provision requiring public companies to disclose their CEO-to-worker pay ratios, but nearly three years after the law passed, the Securities and Exchange commission still hasn’t put the rule in place, thanks in part to business opposition to the proposal, according to ABC News.
Sen. Robert Menendez (D-N.J.), who authored the provision told ABC last year: “It might embarrass some companies to reveal that they pay their CEO in the range of 400 times what they pay their typical worker.”
It can be especially embarrassing when the CEO doesn’t perform. Former J.C. Penney head Ron Johnson, whose compensation was 1,795 times the average worker pay, according to Bloomberg, was recently ousted from his post after failing to turn around the struggling company.