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CEOs Get One-Third of All Pay; Bank of America Uses Taxpayer $$ for Lobbying |
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Two news items out today highlight how far the nation needs to go in re-balancing the economy toward working people.
First, Think Progress points to a Wall Street Journal analysis that shows more than one-third of all pay in the U.S. now goes to executives and other highly-paid employees.
Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total U.S. pay in 2007, the latest figures available. The compensation numbers don’t include incentive stock options, unexercised stock options, unvested restricted stock units and certain benefits.
The Wall Street Journal based its analysis on Social Security Administration data, which doesn’t count billions of dollars more in pay that remain off federal radar screens that measure wages and salaries.
Next, it turns out that Bank of America, which received $45 billion in taxpayer-funded bailout support, has spent more than $1.5 million lobbying on Capitol Hill.
The Charlotte, N.C., company wants flexibility on spending the bailout funds and also wants to fend off restrictions on executive compensation, home mortgage lending and credit card fees. The bank also is lobbying on a consumer rights bill, on student lending issues, on a bill that would’ve allowed bankruptcy judges to alter mortgages and on a proposed federal regulatory oversight agency.
And none of its positions on any of these bills would help working families.
As we noted in April when we released the AFL-CIO Executive PayWatch data, the Bank of America lost nearly $2.4 billion in the fourth quarter of 2008 due to deeper than expected trading and loan losses. Even after receiving billions of dollars in taxpayer money, the bank plans to eliminate up to 35,000 jobs over the next three years—but CEO Kenneth Lewis collected nearly $10 million in 2008, more than 400 times the average amount a bank teller is paid each year. Since becoming CEO in April 2001, Lewis received $134 million in pay, bonuses, stock awards and pension accruals.
As Think Progress notes, between 1979 and 2006, the inflation-adjusted after-tax income of the richest 1 percent of households increased by 256 percent, compared with 21 percent for families in the middle income quintile.
While U.S. worker productivity has skyrocketed over the past 30 years, wages have not kept pace.
America’s working middle class made it clear last November that they wanted change—and reshaping the nation’s economic framework to strengthen the middle class and close the wage disparity between the very top and the rest of us, is fundamental to that change.
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Another story on BAC’s sleazy antics, from http://www.toomuchonline.org:
Innovation is flourishing again in high finance. Take Bank of America, for instance. Executives there are busy innovating end runs around the U.S. Treasury Department’s restrictions on bailout pay. These restrictions currently cover bonuses that go to the bank’s top 100 earners. But Bank of America, despite the restrictions, recently signed a 46-year-old bond trader to a deal that guarantees $6 million in first-year earnings. How can that deal pass bailout pay muster? The bailout pay restrictions don’t apply to new hires. Citigroup is having a tougher time on the innovation front. The chief at Citi’s energy-trading division, Andrew Hall, is threatening to jump ship if Citi tries to slash the estimated $100 million he took home last year. To keep Hall happy, the Wall Street Journal reports, Citi may spin Hall’s division off as a separate company not subject to bailout bonus curbs . . .
As soon as anyone tries to put any curbs on the “greed grab”, the faster the weasels find new tactics to con more money for themselves…
The Too Much site has some really bizarre stories on how these con artists work and their belief that they are worth every dollar (or every million dollars)of that package; then the companies have the gall to tell us that they have to pay those inflated salaries and perks to keep the “talent” from going to another company. You don’t know whether to laugh or barf when you read that…
While I do think CEO pay is really out there sometimes, it is a function of free markets. However, there is also nothing wrong with workers negotiating a bigger piece of the pie. But we also need to realize that these big salaries are a huge motivation to attract the best and most ambitious leaders. It’s a temptation to want to somewhat level the field, but let’s not get too off-base and windup killing the goose that lays the proverbial golden egg!
I blame the boards of many of these organizations for letting this get so far out of control. But let’s not also forget that many CEOs of mid-sized companies are also the founders of their company - they were the ones that took all the risks up front.
Not that this should be a hard and fast rule, but I always thought a 10:1 would be a good guideline. That is, if the average hourly worker wage was $50k, the CEO should make a base pay of around $500,000. And I see nothing wrong with performance bonuses on top of that - but this should also be extended to hourly people as well - everyone should share in both the risks & rewards! (Just seems like good business sense, and would promote everyone pulling in the same direction.)
What are other’s thoughts on this?
I see where you are coming from, Right on Left, and I can agree with your approach on this matter. Reform, though, needs to start at the top. A company’s board of directors is usually elected by their stockholders and most employees at Bank of America do not own stock of their own employer. If they did, they can actively vote every year or so and be able to bring in new blood at the board that can actually make the changes necessary to “level the playing field” so everyone can benefit from a robust economy (whenever it becomes robust). It’s the board that elects the CEO and they are the real decision-makers, in my opinion. More employees at the lower levels need to be involved and informed in what the higher-level employees are doing with regards to making decisions for the company i.e., pay, bonuses, stock awards, lending issues, fees, etc..
The trick is to find a happy medium in all of this.
To any ‘working’ man or woman in this country this is hardly news. We’ve all known for years that our CEOs and other fat-cat executives have been ‘raking it in’ while we’ve had to fight for our very survival. Every year union workers sweat it out while our contracts are being ‘renegotiated’. The executives, on the other hand, sit in their ‘penthouse’ offices and laugh at the ‘little’ people. They call us greedy and uncompromising for wanting no more than a living wage and decent benefits. And they even have the nerve to blame us, the union (and in some cases the non-union) worker, when they have to raise prices on the products and/or services WE sell or manufacture for them. We even get the blame for our jobs being outsourced. After all, America wants low prices, right? Perhaps if we had fair trade rather than free trade we could compete in the ‘global’ market without losing our jobs!
As to BofA using ‘bailout’ money to lobby Congress, again, no surprise. Weren’t they, after all, one of the sub-prime lenders who got us into this mess in the first place? These corporate jackasses have no shame! They have no sense of right and wrong. And they sleep quite well on their silk sheets while the rest of us wonder just how long we’ll even have a bed to sleep in! Capitalism run amok!
2% of America’s richest control greater wealth than the next 70% of the American people. America needs a top to bottom wealth shift to make-up for the last 35 years of going the other way. Creating good paying jobs and reforming health care are two good ways of moving in that direction.
The goose that lays the golden eggs ? Take a look.
The goose is Corporate-run government vamping worker
productivity. The golden eggs are all laid at the top of the
economic pyramid. Never have so few deserved so little and
received so much !