[Pay levels for top U.S. corporate execs have lost any connection
to organizational rationality. ]
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A GOOD YEAR’S PAY FOR A GOOD DAY’S WORK?  
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Sam Pizzigati
July 9, 2023
Inequality.org
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_ Pay levels for top U.S. corporate execs have lost any connection to
organizational rationality. _

Will Be CEO For Food, by Peter Kaminski (CC BY 2.0)

 

Can you imagine a president of the United States proposing a federal
budget that quadruples the paychecks that go to top federal officials?
Of course not. No president would dare risk wandering down that road.
America’s taxpayers, our top pols understand, have a distinct
aversion to seeing anyone get rich off their tax dollars.

Pay rates for top executives within the federal government reflect
that aversion. The U.S. Department of Health and Human Services has,
for instance, over 80,000 employees, and the work these employees do
can literally make the difference between life and death for millions
of people the world over. Yet the top executive at HHS, Xavier
Becerra, last year took home
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$250,000 in compensation.

Within Corporate America’s top executive suites, by contrast,
$250,000 wouldn’t even rate as a decent paycheck for a mere week’s
worth of labor. Last year’s highest-paid U.S. CEOs pocketed
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$250,000 _per day_.

Should we care about these astounding sums now filling the pockets of
our top corporate execs? We sure should. Unlike cabinet secretaries
like Xavier Becerra, corporate execs _are_ getting rich off our tax
dollars. Large numbers of these execs are either running corporations
with massive federal contracts or annually raking in fistfuls of
federal subsidies.

Need some specifics? Consider the pharmaceutical industry and the race
against Covid. Back in 2012, notes
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just-published _Fierce Pharma_ analysis, five biopharma
CEOs pocketed
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$18 million in annual compensation. Last year, biopharma’s 15
highest-paid execs all took home at least $19 million. Their ranks
included the CEOs at the two most prominent Covid vaccine firms:
Pfizer’s Albert Bourla and Moderna’s Stefane Bancel. In 2022,
their paychecks together totaled over $52 million.

What did execs like these two CEOs do to reap their immense windfalls?
They surfed a Covid wave of tax dollars. That wave enabled their
personal “success.” Notes
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Affairs_ journal analysis: “The government invested extensively in
every aspect of the basic science, preclinical development, and
clinical trials for the vaccines.” Tax dollars even “reduced
manufacturing risk by underwriting capacity investments.”

Overall, as data from the People’s Vaccine Alliance would show
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the “excessive profits” Big Pharma giants made off Covid vaccines
created “at least” nine new billion-dollar fortunes in the
pandemic’s first year alone.

We have, unfortunately, learned little in the way of lessons from our
Covid experience. Our tax dollars, a new study
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Good Jobs First indicates, are now turbocharging supersized
climate-change fortunes.

The just-released Good Jobs First analysis — _Power Outrage: Will
Heavily Subsidized Battery Factories Generate Substandard Jobs?_ —
examines a little-known provision in the 2022 Inflation Reduction Act
that may end up costing U.S. taxpayers more than $200 billion over the
next decade, a sum above and beyond the $13 billion that state and
local governments have promised as battery incentives.

Lawmakers see all those billions of tax dollars as a generator of good
wages, but nothing in the battery subsidy fine-print mandates — or
even incentivizes — decent worker paychecks. Ford Motor, for
instance, will be eligible for $6.7 billion in federal subsidies for
its new $3.5-billion battery plant in Michigan, and state and local
officials have already handed Ford $1.7 billion for that plant.

How does that math play out for real-life workers?

“The company has promised to create 2,500 new jobs that it says will
pay an average annual wage of just $45,000 a year,” Good Jobs First
points out, “while reaping subsidies of $3.4 million per job.”

The Good Jobs First study offers a variety of policy proposals “to
set the country’s emerging EV-battery industrial complex on the path
to ‘high road’ employment,” steps ranging from requiring subsidy
recipients to pay wages that at least match the local market rate to
including contract provisions that “claw back” tax-dollar
subsidies should companies fail to deliver the jobs they’ve
promised.

Will steps like these be enough to ensure that the benefits of the
transition to electric vehicles get “justly shared,” as the Good
Jobs First report puts it, “with the workers and communities
building America’s fossil-free economy”? Not unless we also take
steps that meaningfully discourage any attempts by top corporate execs
to grab much more than their “fair share” of federal tax dollars.

How could we do that discouraging? We could include in every
government contract and subsidy provisions that deny public tax
dollars to firms that compensate their top execs at over 25 or 50
times the compensation that goes to their workers.

A bit of historical perspective: Back in the mid-20th century, few
corporate chiefs pocketed over 20 times the annual compensation of
their average workers. CEOs at major U.S. corporations, the Economic
Policy Institute reported
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averaging nearly _400 times_ worker annual pay.

If we shifted gears and only extended taxpayer-funded contracts and
subsidies to corporations that limited their CEO pay to no more than
25 or 50 times worker pay, top execs at companies that get our tax
dollars would have an ever-present incentive to raise their worker
pay, not squeeze it.

Two municipalities, Portland and San Francisco, have already taken
steps in that direction. State and federal lawmakers have introduced
similar proposals, as this Inequality.org _CEO-Worker Pay
Resource_ _Guide_ details
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We clearly can create a more equal United States. Corporate paychecks
could lead the way.

_SAM PIZZIGATI CO-EDITS INEQUALITY.ORG. HIS LATEST BOOKS INCLUDE THE
CASE FOR A MAXIMUM WAGE
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RICH DON’T ALWAYS WIN: THE FORGOTTEN TRIUMPH OVER PLUTOCRACY THAT
CREATED THE AMERICAN MIDDLE CLASS, 1900-1970
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TWITTER: @TOO_MUCH_ONLINE._

* economic inequality
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* CEO Pay
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* standard of living
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