AFL-CIO president Richard Trumka, for his annual efforts at the helm of America’s largest labor federation, makes four times the pay that goes to the federation’s typical employee.
Michael Jeffries, the CEO at national retail giant Abercrombie & Fitch, has been making close to 1,000 times the pay that goes to his typical employee. Shareholders at Abercrombie seem to feel their CEO makes too much.
Last April, in advisory “say on pay” balloting, these shareholders voted against Abercrombie’s executive pay plan. How did Abercrombie’s corporate directors respond? They moved quickly to show how much they feel their shareholder pain. The directors announced a stiff new limit on how much free personal travel CEO Jeffries can take on the Abercrombie jet.
In 2009, the value of this free personal travel perk topped over $800,000. Jeffries must now reimburse the company for any personal travel over $200,000.
Has a new day on CEO pay finally dawned in America’s corporate boardrooms? Not exactly, notes the just-released new 2011 edition of Pay Watch, the AFL-CIO’s energetically informative executive compensation Web site. Abercrombie CEO Jeffries did lose, the new Pay Watch points out, over a half-million in corporate jet perks. But the Abercrombie board, in exchange for the perk limit, agreed to up the total Jeffries take-home by an additional $4 million!
Incredibly revealing anecdotes like this Abercrombie outrage abound in the new AFL-CIO Pay Watch, the best one yet. But Pay Watch does an equally effective job placing these anecdotes in a broader perspective — and, in the process, thoroughly debunks the rationalizations for excessive executive pay that spout regularly from the lips of CEOs and their handlers.
Does current CEO compensation truly reflect, as these handlers love to claim, “pay for performance”? Over the last decade, the new Pay Watch observes, “CEOs of the largest American companies received more in compensation than ever before in U.S. history.” Yet corporate share prices ended 2010 19 percent off their year 2000 high.
The new Pay Watch’s most vital contribution to the ongoing debate over executive pay? That may well be the site’s sublime interactivity.
You can compare, on Pay Watch, how many years you would have to work to match what the CEO at your workplace makes in just one. And you can contrast the pay of superstar CEOs with an assortment of take-homes elsewhere in the American economy — and share the results, for the first time ever, through an innovative Pay Watch Facebook app.
And the pages of Pay Watch don’t just inform us. They couple information with a variety of action steps we can take to advance a meaningful CEO pay reform agenda.
High on that agenda: the campaign to protect the Dodd-Frank financial reform law provision enacted last summer that requires all major companies to disclose the pay gap between their CEOs and their workers. Corporate America is currently trying to gut this new disclosure mandate, by sabotaging the regulations supposed to enforce it.
Disclosure remains the first step to meaningful CEO pay reform. This week’s edition of Too Much, our IPS weekly email newsletter on excess and inequality, spotlights a brand-new reform proposal — from Harvard economist Richard Freeman — that builds on this disclosure. Not on the mailing list for Too Much? You can sign up here to subscribe.