Federation’s ‘Executive Paywatch’ shows greed at the top

Last year, CEO pay at S&P 500 companies increased 6% over the previous year—to an average of $17.7 million in total compensation.

“High CEO-to-worker pay ratios contribute to economic inequality and can undermine employee morale and productivity,” according to the AFL-CIO’s new “Executive Paywatch,” its annual report on CEO compensation.

“While the disclosure requirements for how companies treat their workers are limited, publicly traded companies have been required to disclose their median employee-to-CEO pay ratios since 2018,” the report states. “In 2023, the average CEO-to-worker pay ratio for S&P 500 companies was 268-to-1.

Workers earning the median (or midpoint) of an S&P 500 company payroll would have had to start working in 1755 (prior to the start of the American Revolution) to earn what the average CEO received in 2023, “Paywatch” says.

At the worst offending company – Provo, Utah-based Nu Skin Cosmetics, which paid CEO Ryan Napierski $5,838,579 last year – the disparity is shocking. Napierski got 10,377 times what Nu Skin’s median worker made. That ratio is so huge, said federation Secretary-Treasurer Fred Redmond, that the worker would have to start working for Nu Skin from “before the invention of writing” thousands of years ago through now to equal what the CEO took home last year in compensation.

“Our economy works best when corporations act responsibly toward their employees, their customers, the environment and local communities,” commented the AFL-CIO. “Yet too many corporate CEOs choose management strategies for short-term gains that undermine their companies, their workers and our communities in the long term.

“Workers are coming together to advocate for better working conditions, including family-sustaining wages and benefits, and it’s paying off,” the federation added. “But sadly, ultra-rich CEOs will continue to pay themselves exorbitant wages without transparency.”

The report itself says, “The ratio of CEO-to-worker pay is important. A higher pay ratio could be a sign that companies suffer from a winner-take-all philosophy, where executives reap the lion’s share of compensation. A lower pay ratio could indicate the companies that are dedicated to creating high-wage jobs and investing in their employees for the company’s long-term health.”

This stark difference, too-typical, also offers a context to Americans’ concern about inflation. In 2023, prices that companies pay fell by 3% while consumer prices rose 3%, boosting corporate profits and CEO pay.

Here’s a sample of CEO pay at companies of interest to Illinoisans:

* Archer-Daniels-Midland (now headquartered in Chicago) paid CEO Juan Ricardo Luciano $24,414,668 – a ratio of 300-1 what ADM’s median pay is.

* Caterpillar (now based in Irving, Texas) paid CEO James Umpleby $25,830,332 for a ratio of 434 to 1.

* Deere & Co. (Moline) paid CEO John C. May $26,722,519 for a ratio of 284 to 1.

* Mcdonalds Corp. (Chicago) paid CEO Christopher Kempczinski $19,155,001 for a ratio of 1,212 to 1

* Methode Electronics (Chicago) paid CEO Donald Duda $3,088,086 for a ratio of 285 to 1.

* RLI (Peoria) paid CEO Craig W. Kliethermes $5,185,452 for a ratio of 40 to 1.

 

To read the whole Executive Paywatch, google “afl-cio executive paywatch 2024.”