Some quick facts

This is a shorter version of a much longer rant I wrote and decided not to publish in its original form. --Liam]

According to a recent study, the average CEO's salary at large corporations is 431 times the average worker's salary. In 1990, it was about 74 times.

The study can be found here.

This week's Now (PBS weekly news show) mentioned some additional statistics, such as that CEO salaries go up on average 12% per year, while the average worker's wage barely keeps up with inflation. They also point out that executive salaries have risen from less than 5% of a company's income on average to over 10% (although there are other factors that can play into this as well).

According to this study, the average pay for CEOs of large companies in 2004 was $11.8 million dollars. The average worker made $27,460. If average production worker wages had risen in proportionate percentages since 1990, the average worker would be making over $110,000/year, and if the minimum wage had risen in proportion over the same time period, it would now stand at $23.03/hour.

The rich are most definitely getting richer, the poor are definitely getting poorer (9 years without a cost of living adjustment in the minimum wage, while the costs of basic necessities, to say nothing of the ever increasing employee share of the cost of medical care, continue to rise), and 42 of the largest companies in the nation (for a combined profit of $30 billion dollars in 2004) paid not a red cent in taxes that year, the most recent year for which the study had data.

Tell me again why these countless tax cuts for the rich, while putting the nation into ever greater deeper fiscal holes is a GOOD thing? Or how it makes sense to anyone to cut down on services for the poor while actively reducing their financial status and increasing the number of people who classify as poor?

431 times. That's obscene. A CEO may be worth 10-15 times the value of the average employee. Maybe the rare gem of a CEO may be worth 25 times. But more than 100? More than 400? No way. Especially not when there are countless examples of CEOs and executives drawing these huge salaries while their companies tank, after which they are fired with a golden parachute paying more money as a reward for LEAVING the company than the average worker will earn in their lifetime. At which time the now failing company lays off many of those average workers with a month or two's salary and a "don't let the door hit you on your way out".

Folks, we need to find the happy medium between Communism (everyone gets equal pay regardless of their work) and Fascism (the Corporations and the select few at their heads get everything while everyone else works ever further into indentured servitude). Again, as a centrist, I reject the extreme left wing's vision of a worker's paradise, I've said before why it can't work. But I also reject the extreme RIGHT wing's view, a view which is coming ever closer to true.

Make the CEO's salary no more than 12 times the average salary of the production workers, with significant profit sharing bonuses all around. Make the CEO's bonus percentage no more than 5 times that of the lowest full-time employee in the company. If the CEO does his or her job, they'll be handsomely rewarded... as will everyone else whose hard work helped pay off. If the CEO proves ineffective, he or she won't end up reaping huge rewards while everyone else takes it in the shorts.

Liam.

(Just to be clear, in my proposal, I'm not saying the CEO should receive a bonus only five times as great, I'm saying his or her percentage of salary paid as a bonus should be no more than five times as great. So if the company pays all employees $20,000/year, the CEO can make no more than $240,000/year, and if the CEO takes home a bonus of 50% of his salary (or $120,000), everyone else must take home at least 10% of salary (or 2,000).)