Since the end of George W. Bush’s Reign of Error, CEOs at the 350 largest corporations have seen their paychecks increase by a whopping 54%. How much did your pay go up over the past five years? If you are typical of those who actually work for a living producing real, tangible goods and services, help making the wheels of society turn, the answer is zip. Nothing. Nada.
Today, CEO salaries average $16.5 million a year. That’s almost $300,000 a week. It works out to an hourly wage of just over $7,400. It’s approximately eight times what an average American with a bachelor’s degree makes over a lifetime. Furthermore, CEOs get this kind of pay whether the rest of the economy does well or not. If the economy falters and employees wind up being laid off, that Great King or Queen residing in that upper floor throne room is going to be doing just fine, thank you very much. They might even get a raise for laying off those employees. If they make a bad judgment call that costs the company money – such as overseeing the acquisition of a company with liabilities or overlooking the manufacture of a dangerous product, they may be relieved of their command. However, they’ll typically get a very generous severance package (known as a “golden parachute”). And typically, they’ll wind up literally “failing upwards,” getting an even better position somewhere else.
Most often, however, the kinds of mistakes that would get most of us sacked from our jobs and seriously harm our future prospects have little or no effect on the careers of CEOs. They might even go on to be Vice-President of the United States.
What exactly do these titans of the capitalist system do for such handsome remuneration?
According to Professor Andrea Prat, who teaches economics at Columbia Business School, they engage in “interactions with people” four-fifths of the time. Basically, they hold meetings – mostly with employees.
“Interactions with people” sounds like what most of us do in our jobs. Yet these latter-day kings and queens of industry think that the working people that actually make their companies operate and represent its goods and services to the public aren’t worth $15 an hour?
According to an article published in the Washington Post less than a year ago, average CEO pay in the U.S. is 350 times that of the average worker. That gap is 40% greater than that of runner-up Switzerland. It’s twice that of Germany, three times that of France and Sweden, and a whopping six times greater than Denmark.
And those countries offer guaranteed health care for their citizens and don’t burden their college grads with a lifetime of student loan debt.
As more Americans become aware of this gross inequality, it is small wonder that they are getting increasingly pissed off. And increasingly, that anger and frustration is being channeled in a direction that is making the Corporate Lords of the Capitalist Universe very, very nervous.