Five months after Republicans passed their massive corporate tax cut, the CEOs of American companies are popping their champagne corks, toasting their bonanza of pay increases. American workers are still waiting for Trump’s promised wage increase of $4,000 per year.
Pfizer Pharmaceuticals CEO Ian Read should be the poster child for runaway corporate greed. Thanks to the Republicans’ new tax cut, Pfizer received a $10.7 billion windfall in tax savings. Pfizer in turn used their massive tax savings to lavish a 61% increase in pay for their CEO. His total compensation went from $17.3 million in 2016 to $27 million in 2017.
The increase to $27 million happened within days of Pfizer reaping the $10.7 billion from the Republican tax cuts. Pfizer gave their CEO an $8-million-dollar bonus bringing his total compensation to $27 million for 2017. CEO Read’s total compensation is approximately 327 times the median pay of a Pfizer worker.
The Pfizer CEO pay increase is one of the most outrageous, but it’s not just an isolated outlier. It follows a well-established pattern over the last 30 years of a rapidly growing disconnect between CEO and worker compensation. The massive Republican tax cuts for corporations will certainly open the floodgates to even more unjustified increases in CEO pay and greater inequality. The new tax law slashes the corporate tax rate from 35% to just 21%.
The newly released AFL-CIO Executive Paywatch warns of the historical explosion in average CEO pay for S&P 500 companies vs. that of rank-and-file workers. These CEO’s made on average $13.94 million in 2017—361 times more money than rank-and-file workers.
Total compensation for CEOs of S&P 500 companies increased in 2017 to $13.94 million from $13.1 million in 2016. That’s a 6% increase for CEOs as their employees saw little or no increase in pay. This pay gap clearly reflects ever widening income inequality in the country.
In 2017 the CEO-to-worker pay ratio was 361-1.
In 2016 the ratio was 347-1.
In 1990 the ratio was 107-1.
In 1980 the ratio was 42-1.
The AFL-CIO study lists the toy-maker Mattel as the company with one of the highest pay ratio of any S&P 500 company. “Mattel’s median employee is a manufacturing worker in Malaysia who made $6,271, resulting in a CEO-to-employee pay ratio of 4,987 to 1.” Mattel’s CEO was paid more than $32 million in 2017!
Outsourcing jobs as Mattel has done to low-pay countries increases the disparity between CEO pay to worker pay. However, the disparity between U.S. companies and their American workers show similar spreads in pay across all types of American companies.
The CEO of Walmart was paid nearly $23 million while the average Walmart worker made just above $19,000. That’s a ratio of 1188 to 1.
The CEO of PepsiCo made 650 times more than their average employee. The CEO earned $31 million while their average employee made $48,000.
Centene, the recently announced new Iowa healthcare Medicaid provider, pays their CEO 379 times more than their average employees. The CEO was paid $25 million and their average employee earned $66,000.
Dollar General, with a growing number of stores across Iowa, is on the high end of CEO to worker pay at 658 to 1. Their CEO earned $9 million compared to their average worker’s pay of $13,000.
Beginning this year, public companies are required by Dodd-Frank to disclose the ratio of CEO pay with the median pay of their employees. AFL-CIO Executive Paywatch offers a comparative list of American companies’ CEO to worker pay ratios.
According to the Americans for Tax Fairness, “corporations have spent 37 times more on stock buybacks than they’ve spent on (employee) bonuses and wages.” The Republican tax cut is paying off big for the CEOs of American companies while American workers are falling further behind.
by Rick Smith