Place your bets! Which Fortune 500 CEO will run away with the most money?
Check this app to get the inside scoop before you place your bet. How much is the CEO paid? How much stock do they own? How much does their corporation spend on stock buybacks to boost the value of the stock they hold? How much do workers make? How many more times is the CEO's compensation compared to a worker (CEO/Worker salary ratio)?
Check this app to see how President Biden's plan to make CEOs pay their fair share of taxes might trip up your candidate for the Kentucky Greed Derby. And how new rulings by the National Labor Relations Board (NLRB) will enable workers to unionize to demand a fair wage.
Corporate greed is galloping away
Unbridled corporate greed (pun intended)
Corporate CEOs claim they cannot raise employee pay but have no trouble finding resources to enrich themselves and wealthy shareholders.In 2021 and 2022, S&P 500 corporations spent record sums on stock buybacks, a maneuver that artificially inflates the value of a company’s stock — and CEOs’ stock-based pay.
All employees contribute to company profits. But instead of broadly sharing the wealth, companies are using a once-illegal form of market manipulation to make those at the top of the corporate ladder even richer. A recent Institute Of Policy Studies report examines the buyback activities of the 100 S&P 500 companies that pay the lowest median wages, to see how CEOs have rigged the system for themselves. They call these corporations the “Low-Wage 100.”
- Low-Wage 100 CEO pay averaged $15.3 million and median worker pay averaged $31,672 in 2022
- The CEO-worker pay gap at the Low-Wage 100 averaged 603 to 1 in 2022
- Live Nation Entertainment sported the fattest CEO paycheck and the widest pay gap. Michael Rapino hauled in $139 million, 5,414 times as much as his firm’s $25,673 median pay
- Aptiv, a vehicle parts maker with federal government contracts, had the lowest median pay, just $8,139 for a full-time manufacturing worker in Mexico
The Low-Wage 100 have spent more than $340 billion on stock buybacks since 2020
90 of the Low-Wage 100 reported combined stock buyback expenditures of $341.2 billion. This financial maneuvering artificially inflates executive stock-based pay and siphons funds from worker wages, R&D, and other productive investments that would stimulate long-term growth.
- Lowe’s led the buybacks list, with $34.9 billion over the past three and a half years. In 2022 alone, Lowe’s spent $14.1 billion on buybacks, enough to give every one of its 301,000 U.S. employees a $46,923 bonus. In 2022, Lowe’s CEO Marvin Ellison enjoyed annual compensation of $17.5 million. The retailer’s median annual worker pay: a mere $29,584.
- Home Depot came in second in our buyback rankings, with $28.9 billion in stock buybacks over the course of our study period. CEO Edward Decker kept the spigot flowing furiously after taking Home Depot’s helm in 2022. The company’s repurchases have totaled over $5.7 billion since last October. In 2022, Decker made 491 times Home Depot’s median pay of $30,100.
- Walmart ranks third on the buybacks list, with nearly $23.9 billion. CEO Doug McMillon took in $25.3 million in 2022 while half of his employees earned less than $27,136.
Overpaid CEOs. Exploited workers.
Fix this rigged system that exploits workers
- Stock buybacks taxes and restrictions: In the 2022 Inflation Reduction Act, Congress passed a 1 percent excise tax on CEO pay-inflating stock buybacks. President Biden proposed quadrupling this tax in his 2023 State of the Union address. Biden has also included a proposal in his federal budget plan that would ban top executives from selling their personal stock for a multi-year period after a buyback, preventing CEOs from timing share repurchases to cash in personally on a short-term price pop they themselves artificially created. A Senate bill, the ALIGN Act, would do just that.
- Federal contractor incentives: In 2022, the Department of Commerce announced plans to give priority in the awarding of new CHIPS subsidies for domestic semiconductor manufacturing to firms that do not engage in any stock buybacks. The administration has applied a number of other pro-worker conditions on federal contracts, but federal agencies could go much further to wield the power of the public purse against inequality. The Patriotic Corporations Act could serve as a model. This bill would grant preferential treatment in contracting to firms with pay ratios of 100 to 1 or less, among other benchmarks, including neutrality in union organizing campaigns.
- Excessive CEO pay tax: Laws to hike corporate taxes on companies with wide CEO-worker pay gap are now raising revenue in two major cities, San Francisco and Portland, Oregon. The more recent of the two taxes, San Francisco’s “Overpaid Executive Tax,” became effective on January 1, 2022. In May 2023, city officials announced that they now expect the tax to bring in about $125 million per year, a higher return than originally expected. San Francisco’s executive tax has also proved more resilient than other local revenue sources. Legislation similar to San Francisco’s has been introduced in the U.S. House and Senate and came into play during the Build Back Better negotiations. Higher tax rates on companies with wide CEO-worker pay gaps create an incentive to both rein in executive pay and lift up worker wages, all while generating significant new capital for vital public investments. - Institute For Policy Studies
United we bargain. Divided we beg.
Biden’s NLRB Brings Workers’ Rights Back From the Dead. The Board's decision in CEMEX makes union organizing possible again. The decisions recreate “a system with no tolerance for employers’ coercion of their employees” when their employees seek their legal right to collective bargaining. - The American Prospect
"… the revised framework represents an effort to better effectuate employees’ right to bargain through their chosen representative, while acknowledging that employers have the option to invoke the statutory provision allowing them to pursue a Board election. When employers pursue this option, the new standard will promote a fair election environment by more effectively disincentivizing employers from committing unfair labor practices."
Time to fix the system that the mega-rich have rigged for themselves
Institute For Policy Studies
IPS is centered in our vision: we believe everyone has a right to thrive on a planet where all communities are equitable, democratic, peaceful, and sustainable. Our intersecting programs and initiatives, led by a diverse group of expert staff and associate fellows, are helping to shape progressive movements toward this vision. Read their Executive Excess report.
Combating inequality means both lifting up and building power at the bottom, and breaking up concentration of wealth and power at the top. That’s why we work at the intersection of economic and racial justice through projects designed to build leadership and self-empowerment of black workers, immigrant workers, and low-wage workers, youth and families affected by incarceration, along with projects aiming to reverse the rules that criminalize poor people of color, and projects fighting to ensure that the wealthy and Wall Street corporations pay their fair share of taxes. - IPS
TakeAway: Tired of being exploited? Overworked and underpaid? Unionize. Vote in elections.
Deepak
DemLabs
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