Corporate greed hampers fight against inflation
Jake Johnson for
Common Dreams
The
AFL-CIO's annual
report on executive pay shows that the CEO-to-median-worker-pay ratio
at S&P 500 companies was 268 to 1 last year, meaning that "it would
take more than five career lifetimes for workers to earn what CEOs receive in
just one year."
"On
average, the median employee of an S&P 500 company would have had to start
working in 1762 (prior to the American Revolution) to earn what the average CEO
received in 2023," says the report, which points to a number of specific
companies as the poster children of out-of-control executive compensation.
From
2021 to 2023, ExxonMobil CEO
Darren Woods' total compensation rose from $23.6 million to $36.9
million as the company reaped massive windfall profits from energy market
chaos sparked by Russia's invasion of Ukraine. Starbucks CEO Laxman Narasimhan
saw his compensation jump 66%—from $8.8 million in 2022 to $14.6 million in
2023—as the company aggressively fought unionization efforts.
Overall,
CEO pay at leading U.S. corporations rose 6% in 2023 compared to the previous
year as companies continued to pass costs onto consumers—even as business expenses
declined. Last year, the AFL-CIO's new report notes, "commodity prices
that companies pay fell by 3% while consumer prices rose 3%, boosting corporate
profits and CEO pay."
Over
the past decade, the average S&P 500 CEO has seen a pay increase of roughly
$4.2 million.
The executive compensation surge has been fueled in part by stock buybacks, which the AFL-CIO describes as "financial engineering practice that increases earnings per share that is used in many CEOs' incentive pay plans." Stock-based awards made up about 70% of total executive compensation in 2023, a separate study found.
Top
U.S. companies bought back $795.1 billion worth of their shares last year, the
AFL-CIO noted Thursday. One estimate from Goldman Sachs indicates
share repurchases by S&P 500 companies could surpass $1 trillion next year
for the first time in U.S. history.
In
May, Apple—whose CEO received $63.2 million in total compensation last year—announced a $110 billion stock buyback authorization,
the largest share repurchase program by a single company in the nation's
history, beating its own record set in 2018.
The
massive tax cuts for corporations and the rich that the Republican-controlled
Congress passed in 2017 and former President Donald Trump signed
into law have also contributed to rising executive pay, the AFL-CIO said in its
new report.
The
law, which sparked a massive stock buyback spree, "permanently reduced the
top corporate income tax rate from 35% to 21%," reads the new report.
"Economists estimate that 51% of the income gains from the corporate tax
cuts went to firm owners, 10% went to the top five highest-paid senior
executives, 38% went to the top 10%, and 0% of the wage gains went to the
bottom 90% of workers."
The
AFL-CIO, which has been tracking executive pay since 1997, said its new
findings present a mere "snapshot of the extreme economic inequity that
will only worsen under Donald Trump's Project 2025 Agenda."
"This
level of inequality is not sustainable," Fred Redmond, the AFL-CIO's
secretary-treasurer, said during a press call on Thursday. "Working people
are sick and tired of politicians like Donald Trump pushing massive tax breaks
for CEOs."
Trump,
the Republican presidential nominee, has proposed extending elements of his tax
law that are set to expire at the end of next year while slashing the corporate tax rate even further.
The
Trump campaign and Project 2025—a far-right agenda crafted by at least 140
former Trump administration officials—have both called for a reduction in corporate taxes, even
as profits surge to all-time highs.
Last
month, the AFL-CIO launched an online tool aimed
at educating U.S. voters on "how a second Trump term would decimate
workers' ability to organize; gut health and safety protections; attack civil,
labor, and consumer rights; eviscerate retirement security; and undermine our
ability to hold the wealthy and corporations accountable."
"We
are deeply concerned about pro-corporate policies that would drive up costs,
put people out of work, endanger people's lives, and make it harder for working
people to get ahead," said the labor organization, which has endorsed
Democratic nominee Kamala Harris. "For unions, this agenda would make it
tougher for members to win gains in our next contracts and stack the deck in
favor of CEOs."
