Executive Pay

A Window into America’s Executive Suites

Research & Commentary
April 25, 2011

by Inequality.org

Executive PaywatchThe data in the latest executive compensation survey from the AFL-CIO, America’s largest labor federation, effectively debunk the justifications for excessive pay that emanate regularly from CEO flacks — and buttress the new Dodd-Frank reform act provision that requires major firms to disclose the pay ratio between their top execs and typical workers.

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 Abercrombie & Fitch, has been making close to 1,000 times the pay that goes to his typical employee. A good many shareholders at the giant retailer seem to feel their CEO makes too much.

Last April, in advisory “say on pay” balloting, an Abercrombie shareholder majority voted against their company’s CEO pay plan. Abercrombie’s corporate directors would, in response, rush to show they feel the shareholder pain — by limiting how much free 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.

So is a new day on CEO pay finally dawning in America’s corporate boardrooms? Not exactly, suggests 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 excuses and justifications for excessive executive pay that spout regularly from the lips of CEOs and their handlers.

Do current CEO rewards reflect, as these handlers love to claim, “pay for performance”? Over the last decade, 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 2000 high.

The new Pay Watch’s overall top 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 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 start disclosing the pay gap between their CEOs and their workers.

Top corporate execs are currently trying to gut this new disclosure mandate. They’re pressing the federal Securities and Exchange Commission to write regulations that really won’t enforce it. At Pay Watch, you can help stop them.

Executive Pay,