"CEOs are getting more because of their power to set pay, not because they are increasing productivity or possess specific, high-demand skills."
This matters because it remains a primary factor contributing to growing income inequality.
As the study explains:
"This escalation of CEO compensation, and of executive compensation more generally, has fueled the growth of top 1.0% and top 0.1% incomes, leaving less of the fruits of economic growth for ordinary workers and widening the gap between very high earners and the bottom 90%."
But what about the claim that if we pay CEOs less, the economy will only deteriorate since they are the "engines that drive the economy"?
That is false, as the study states:
"The economy would suffer no harm if CEOs were paid less (or taxed more)...We need to enact policy solutions that would both reduce incentives for CEOs to extract economic concessions and limit their ability to do so. Such policies could include reinstating higher marginal income tax rates at the very top; setting corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation; establishing a luxury tax on compensation such that for every dollar in compensation over a set cap, a firm must pay a dollar in taxes; reforming corporate governance to give other stakeholders better tools to exercise countervailing power against CEOs' pay demands; and allowing greater use of 'say on pay,' which allows a firm's shareholders to vote on top executives' compensation."
Historically, it is unregulated capitalism, capitalism run amok that deteriorates economies.
In 2017, McDonald's CEO, Steve Easterbrook took home $21.7 million.
But the typical McDonald's employee? $7,017.
Walmart CEO Doug McMillon made $22.8 million in 2017.
The average Walmart employee--$19,177.
Amazon CEO Jeff Bezos is the richest man in modern history, surpassing the $150 billion point last year, according to the Bloomberg Billionaires Index.
Yet the average Amazon worker earned $28,446, scarcely enough to prevent thousands of Amazon workers from relying on government-subsidized public assistance to try to make ends meet.
Vermont Senator and 2020 democratic presidential candidate Bernie Sanders told Newsweek earlier this month:
"The American people are sick and tired of corporate CEOs who now make 278 times more than their average employees, while they give themselves huge bonuses and cut back on the healthcare benefits of their employees."
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).