Vote 2020 graphic
Everything you need to know about and expect during
the most important election of our lifetimes

CEOs Now Officially Have to Tell You How Grossly Overpaid They Are

Illustration for article titled CEOs Now Officially Have to Tell You How Grossly Overpaid They Are

In an effort to salary-shame absurdly overpaid chief executives, the Securities and Exchange Commission adopted a new rule on Wednesday which will compel CEOs to report the ratio of their yearly earnings to the median salary of its employees.

Advertisement

While CEOs of public companies already had to disclose their salaries, the new rule is notable in that it forces the companies to compare these salaries to workers’ pay and confront head-on how fucked up capitalism is.

Mashable reports:

Companies and their lobbyists had worked hard to amend the rule, arguing that they should be allowed to exclude many foreign workers, who often make low wages. In the end, they mostly failed. Companies will only be able to exclude 5% of their foreign workforce from the calculations.

CEO salaries became one of the central rallying cries during the financial crisis, particularly as executives were compensated with millions of dollars despite overseeing crumbling businesses. Highly paid chief executives were often used to illustrate the wealth gap that had only been widened by the country’s economic woes.

Advertisement

In 2013, a report from the AFL-CIO found that CEOs of the biggest companies in the U.S. make on average 373 times the salary of a non-managerial employee. In 2012, CEOs’ pay rose 16 percent, compared with employees’ wages, which increased only 2.4 percent.

The rule will not officially go into effect until January 1, 2017 and the first ratios won’t have to be reported until 2018, so sit tight for another few years (and then a few centuries more) of extreme financial inequality.


Contact the author at joanna@jezebel.com.

Image via AP.

Share This Story

Get our newsletter

DISCUSSION

pinktetris
SadeVEVO ✓ official

There was a time when the CEO of McDonald’s made about ten times as much as one of his lowest tier employees, and he thought it was a travesty of justice. Not 100,000 times as much, but 10 times as much. He felt ashamed because the board offered him so much money for doing so very little. He felt ashamed at making more money than he was entitled to.

Those early business pioneers believed that capital was the result of hard work. It was not the result of inheriting money, failing to reinvest your money, or profiting from the providence of society without paying your dues. It was not about using society to compensate your losses, while you remained the sole benefactor of your profits.

They weren’t upset at the 90% top tax rate in the 1950s, because they knew it helped create the most enduring brands that this nation had ever seen. Nowadays, the typical American calls a 90% top tax rate “socialist”. Heck, most Americans would call the 40% tax rate of the 1990s socialist. But back then, they called it capitalism.

We have all the same social programs we had the 1950s and then some. But, unlike the 1950s, no one at the top is paying for these programs—even as they reap the benefits of them. It’s the middle class who keeps these programs afloat. And most of this money now fuels military and national interests, instead of democratic ones.

Yup. It’s the same amount of socialism, but administered towards a nationalist rather than a democratic end. That’s not the kind of socialist you’d wanna be anyway, America. If aynthing, America used to be a democratic socialism, propped up by the people who benefited from it the most. Now, if it is any kind of socialism, is a nationalist socialism; it pays for the interests of only the nation itself and its endeavors abroad, at the expense or people who benefit from it the least.

And the shame that those early CEOs felt for getting more money than they earned? For hoarding capital without enterprise? They no longer feel that shame. They expect us workers to feel that shame for them.