The Institute for Policy Studies and United for a Fair Economy released their 10th annual CEO compensation survey earlier this week. Among the key findings in “Executive Excess 2003: CEOs Win, Workers and Taxpayers Lose“:
- CEOs were rewarded in 2002 for laying off workers in 2001.
- As employee pension plans falter, CEOs have secured their own personal futures with higher pay.
- By blocking proposed stock options 10 years ago, Congress helped usher in an era of runaway CEO pay.
- Blocking stock option reforms also helped U.S. corporations avoid paying their fair share of taxes.
- As corporate offshore tax shelters proliferate, CEOs win and ordinary taxpayers lose.
- The CEO-worker wage gap persists.
The report also offers a range of reforms that could be implemented:
- Require that stock options be expensed.
- End taxpayer subsidies for excessive compensation, whether in cash or stock.
- End taxpayer subsidies for gold-plated pensions.
- Protect workers by requiring more realistic pension accounting.
- Ban companies from offering executive perks not broadly available to employees.
- Improve plain-English disclosure standards of executive compensation.
- Require stockholder approval of extraordinary executive severance and retirement packages.
- Increase barriers to selling based on insider information.
This seems like an appropriate topic for discussion as Labor Day nears. What think you? Does this call to action go too far? Not far enough?
Even if we look at Hewlett-Packard alone, 25,700 layoffs were announced for 2001, and Carly Fiorina’s pay increased 231% between 2001 and 2002. That’s certainly not the highest pay raise — AOL Time Warner‘s Gerald Levin’s pay increased more than 1,500% (perhaps because of his retirement?) and Sun Microsystems‘ Scott McNealy made a bigger bank by more than 1,000% — but it’s a distracting discrepancy.