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we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.
AP’s Today in History for August 18th
Mongol ruler Genghis Khan dies; Women in U.S. clinch right to vote; James Meredith graduates from Univ. of Miss.; Vladimir Nabokov’s ‘Lolita’ published in U.S.; Actor-director Robert Redford born.
Breakfast Tune The Entertainer
Something to think about, Breakfast News & Blogs below
CEO compensation has grown 940% since 1978. Typical worker compensation has risen only 12% during that time
Lawrence Mishel and Julia Wolfe, Economic Policy Institute
What this report finds: The increased focus on growing inequality has led to an increased focus on CEO pay. Corporate boards running America’s largest public firms are giving top executives outsize compensation packages. Average pay of CEOs at the top 350 firms in 2018 was $17.2 million—or $14.0 million using a more conservative measure. (Stock options make up a big part of CEO pay packages, and the conservative measure values the options when granted, versus when cashed in, or “realized.”) CEO compensation is very high relative to typical worker compensation (by a ratio of 278-to-1 or 221-to-1). In contrast, the CEO-to-typical-worker compensation ratio (options realized) was 20-to-1 in 1965 and 58-to-1 in 1989. CEOs are even making a lot more—about five times as much—as other earners in the top 0.1%. From 1978 to 2018, CEO compensation grew by 1,007.5% (940.3% under the options-realized measure), far outstripping S&P stock market growth (706.7%) and the wage growth of very high earners (339.2%). In contrast, wages for the typical worker grew by just 11.9%.
Why it matters: Exorbitant CEO pay is a major contributor to rising inequality that we could safely do away with. CEOs are getting more because of their power to set pay, not because they are increasing productivity or possess specific, high-demand skills. This escalation of CEO compensation, and of executive compensation more generally, has fueled the growth of top 1.0% and top 0.1% incomes, leaving less of the fruits of economic growth for ordinary workers and widening the gap between very high earners and the bottom 90%. The economy would suffer no harm if CEOs were paid less (or taxed more).
How we can solve the problem: We need to enact policy solutions that would both reduce incentives for CEOs to extract economic concessions and limit their ability to do so. Such policies could include reinstating higher marginal income tax rates at the very top; setting corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation; establishing a luxury tax on compensation such that for every dollar in compensation over a set cap, a firm must pay a dollar in taxes; reforming corporate governance to give other stakeholders better tools to exercise countervailing power against CEOs’ pay demands; and allowing greater use of “say on pay,” which allows a firm’s shareholders to vote on top executives’ compensation.
- Tulsi Gabbard Gets Some Vindication
- The quiet death of the “white Bernie Bro” attack
- The Appalling Numbers Behind America’s CEO Pay
- George W. Bush’s Infuriating Innocence Project
Something to think about over coffee prozac
The media is so fair to Bernie that they are going to have multiple panels stacked with Washington Post reporters and former Hillary staffers to discuss just how fair they are in their coverage. FULL: https://t.co/QtZCqnPEAf pic.twitter.com/yqePsXsANV
— Krystal Ball (@krystalball) August 14, 2019