The outrageous pay of CEOs‼️ Huh❓

In a recent speech Hillary Clinton said:

“I think it’s fair to say that as you look across the country, the deck is still stacked in favor of those already at the top. And there’s something wrong with that. There’s something wrong when CEOs make 300 times more than the typical worker,” Clinton said.

Most people accept that general statement as true. But it’s not true, it’s very misleading. The fact is that according to the Bureau of Labor Statistics, the average CEO earns about five times the average (typical) worker. You are once again being subjected to misleading populist rhetoric. If you don’t believe me, check out the BLS data yourself HERE 

If you want to read the source of this claim, look at the following from the AFL-CIO. Talk about rhetoric. Do you assume all the following is true as well? Technically it is, except it is a mix of facts that don’t represent America. For example, S&P 500 companies generally don’t pay their workers minimum wage so raising it for the population cited is meaningless. But more important, the employees of S&P 500 companies represent only 15% of all US non-farm workers. 

The fact is there are 246,240 CEOs in the U.S. with an average annual salary of $180,700 compared with $47,230 for all occupations. The vast majority of Americans work for these smaller organizations. Most hard-working middle-class Americans don’t work for a high-paid CEO. For over 85% of Americans the ratio of CEO to worker pay is nowhere near 300:1.  

Keep in mind too that CEO compensation (the S&P group) is about 12% base salary and about 35% total in cash including performance-based bonuses. The balance is stock awards, perks and pensions. Much of the cost of this compensation is borne by shareholders, not consumers. SOURCE:The Hay Group for the WSJ. 

All this adds up to being very well compensated and in some cases over compensated, but it still represents a tiny sliver of the CEO experience in America and with minuscule impact on all working middle-class families. 

DON’T LET YOURSELF BE THE VICTIM OF RHETORIC LEFT OR RIGHT

From the AFL-CIO website:  In 2013 the CEO-to-worker pay ratio was 331:1 and the CEO-to-minimum-wage-worker pay ratio was 774:1. America is supposed to be the land of opportunity, a country where hard work and playing by the rules would provide working families a middle-class standard of living. But in recent decades, corporate CEOs have been taking a greater share of the economic pie while wages have stagnated and unemployment remains high.

Highly paid CEOs of low-wage employers are fueling this growing economic inequality. In 2013, CEOs of the Standard & Poor’s (S&P) 500 Index companies received, on average, $11.7 million in total compensation, according to the AFL-CIO’s analysis of available data from 350 companies.

Today’s ratio of CEO-to-worker pay is simply unconscionable. While CEO pay remains in the stratosphere, production and nonsupervisory workers took home only $35,239 on average in 2013, and a full-time worker making the federal minimum wage earned only $15,080.

Even as companies argue that they can’t afford to raise wages, the nation’s largest companies are earning higher profits per employee than they did five years ago. In 2013, the S&P 500 Index companies earned $41,249 in profits per employee, a 38% increase.

It doesn’t have to be this way. Politicians should raise the minimum wage. Corporations should pay their employees a living wage. And workers should have a collective voice on the job to demand their fair share.