‘Runaway CEO Pay’ Could Support 102,000 Jobs, AFL-CIO Says
Chief executive officers at 299 U.S. companies had combined compensation of $3.4 billion in 2010, enough to pay more than 102,000 workers, the AFL-CIO labor federation reported in a study.
CEOs at companies including Viacom Inc. (VIA/B) and Oracle Corp. (ORCL) averaged $11.4 million in total compensation in 2010, according to the report, which used data from website salary.com. Viacom’s CEO Philippe P. Dauman earned $84.5 million last year, the highest among the executives, according to the report.
“The disparity between CEO and workers’ pay has continued to grow to levels that are completely stunning,” union President Richard Trumka said today at a Washington news conference. He said the U.S. is facing “runaway CEO pay.”
The AFL-CIO, with 12.2 million members, has led U.S. labor unions in criticizing the compensation of executives. Trumka was at the head of a march on Wall Street last year to demand taxes on the bonuses of executives at banks including Goldman Sachs Group Inc. (GS), the fifth-biggest U.S. bank.
Trumka, 61, had total compensation of $283,340, including $246,827 in salary, according to a 2010 union filing with the Labor Department. Service Employees International Union President Mary Kay Henry had compensation of $253,660, including $213,801 in salary, according to a separate filing.
Trumka said since 1959, labor leaders have had information about their pay available. “My ratio to employees here, it’s 4- to-1,” he said. “That’s not bad.”
‘Say on Pay’
Pay for corporate executives may face limits this year because the law overhauling financial regulations gave shareholders a “say on pay” vote on the amount given to top company management, according to the AFL-CIO report. While the votes aren’t binding, they will encourage boards to enact compensation reforms, it said.
The 2010 Dodd-Frank Act requires the compensation committees of a company’s board be composed of independent directors, and the AFL-CIO report said shareholders must be given an advisory vote on the payments made to executives when they are fired or resign.
Trumka urged lawmakers to resist Republican efforts aimed at weakening or repealing the law’s pay-disclosure requirements. A Republican proposal would strip a provision that requires publicly traded companies to report the ratio of pay between the CEO and the median pay of their employees.
‘Business As Usual’
Critics are “trying to do everything they can to dilute the law and go back to business as usual for Wall Street,” he said.
The average pay for CEOs of companies in the Standard & Poor’s 500 Index is enough to cover the salaries of 28 U.S. presidents or more than 700 minimum-wage workers, according to the report. The combined compensation would support 102,325 jobs paying the median wage of all workers, the group said.
The AFL-CIO took aim at payments for departing executives called golden parachutes, corporate jet travel, preferential pensions and perks unrelated to performance.
Dauman, 54, more than doubled his compensation from $34 million in 2009, based on U.S. Securities and Exchange Commission rules, according to a regulatory filing. The company’s brands include MTV Networks and Paramount Pictures.
Occidental Petroleum Corp. (OXY) CEO Ray R. Irani, 76, received compensation valued at $76 million in 2010, followed by Oracle Corp. CEO Lawrence Ellison, 66, who received $70 million. Occidental is an oil and gas exploration and production company, and Oracle provides integrated business software and hardware systems.
The union’s website links to a database, letting visitors search for a CEO’s total compensation and compare it to their earnings. The union is urging visitors to write lawmakers in opposition to revising the Dodd-Frank law.
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