On September 3, 2013, Sam Pizzigati writes on NationOfChange.org:
Corporate America, naturally, disagrees. High executive pay, corporate leaders insist, simply reflects high performance.
This year’s just-released 20th anniversary Executive Excess report puts this claim to the test —by measuring America’s top-paid CEOs of the past 20 years against a performance yardstick that even the most inventive corporate flack could never game.
This performance yardstick starts with bankruptcy. CEOs who’ve led their companies into collapse — or only averted collapse because taxpayers bailed them out — have clearly performed poorly. So have CEOs who end up getting fired. And so, as well, have CEOs whose firms have had to shell out significant fraud-related fines and settlements.
No CEO who has been “bailed out, booted, or busted,” as the new Executive Excess report puts it, can possibly be considered a “high performer.”
How many of America’s most highly paid CEOs of the past 20 years rate as “poor performers” by this no-frillsExecutive Excess yardstick? Institute for Policy Studies analysts have done the calculations, taking the Wall Street Journal’s annual lists of America’s 25 most highly paid CEOs as their prime data source.
Of the 500 places on the last 20 of these lists nearly 40 percent have been occupied by CEOs who went on to be “bailed out, booted, or busted.”
An even higher share of highly paid CEOs — 100 percent — has enjoyed an annual subsidy from America’s taxpayers. The more corporations pay their CEOs, under current law, the more they can deduct off their corporate taxes.
Executive Excess 2013 highlights the pending legislation that would undo this massive corporate tax break — and also lists a number of other promising steps that could help rein in CEO pay excess. Congress could, for instance, deny federal contracts to firms that pay their CEOs over 25 or 50 times worker pay.
Back in the 1960s, hardly any American corporate CEOs took home more than 50 times what typical workers made. By 1993, CEOs were averaging 195 times worker pay. The current average differential: 354 times.
“This scares us,” concludes Executive Excess 2013. “What scares us even more: the thought that unless regulators, lawmakers, or shareholders do something to stop this madness, 20 years from now today’s corporate compensation will seem as modest as the pay levels of 1993.”
Watch the two-minute video intro to the 2013 Executive Excess:
