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Dear John,
Many CEOs have found a clever way to goose their own pay.
In 2023, typical pay for the 100 highest paid CEOs was over $29 million -- 300 times the pay of their typical worker. In 1965, CEOs were paid 21 times more than the average worker.
Has CEO pay skyrocketed because execs are that much more valuable than before? Or have they just rigged the game that much more?
The explosion in CEO pay is largely because they are compensated based on stock performance, which they’ve found a sneaky way to manipulate: stock buybacks!
Check out this week’s video to learn more about this corporate trick, and what we need to do about it! Then pass along the link to anyone who cares about workers.
Why does this matter? Well, in a stock buyback, corporations use profits to repurchase shares of their own stock, artificially inflating their value. That’s money they could be spending to pay workers more or improve products.
Nearly all of the ten highest paid CEOs have overseen billions in buybacks in recent years.
Buybacks are stock manipulation, and used to be banned until the 1980s (thanks to Reagan). Since then, they’ve helped fuel record levels of inequality.
Buybacks should be banned again.
Robert Reich
Inequality Media
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