CEO pay: Most cats not that fat

The fat cats just keep getting fatter at our expense, according to a report from As You Sow, an Oakland-based nonprofit founded in 1992 to promote “environmental and social corporate responsibility through shareholder advocacy, coalition building and innovative legal strategies.”

Its report ranked the 100 most overpaid CEOs of Standard & Poor’s 500 companies, adding that CEO pay grew 997 percent over 36 years — an astonishing number.

But while some of the largest and most successful U.S. companies pay their top leadership quite handsomely, there are many more CEOs in America that make nowhere near what that handful in the S&P 500 does.

Indeed, a report from the American Enterprise Institute last year suggested that allowing the compensation for a few hundred CEOs of multinational corporations to represent pay for the CEOs at more than 7 million private firms in the U.S. was missing the forest for the trees.

Drawing upon comprehensive data from a U.S. Bureau of Labor Statistics report, AEI found that a more complete analysis of company heads’ compensation revealed nowhere near the same scope and disparity of pay with that of employees. “In 2014, the BLS reports that the average pay for America’s 246,240 chief executives was only $180,700,” wrote AEI’s Mark J. Perry, a professor of economics and finance at the University of Michigan’s Flint campus.

Moreover, “the real CEO-to-worker pay ratio has not been increasing, as is frequently reported, but instead has been remarkably constant over the past 13 years, averaging 3.8-to-1 in a tight range between a maximum of 3.89-to-1 in 2004 and a minimum of 3.69-to-1 in both 2005 and 2006.”

While whether CEOs at major corporations are making too much is best left between them, their boards of directors and shareholders, we feel America’s CEOs are getting a bad rap.

Reprinted from the Orange County Register

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