Saturday, January 14


I'm aware that the levels of CEO compensation in American corporations is absolutely shocking to most people. I live with it all the time, but it still hits me in the gut when I think about it. For instance, the CEO of my own company made something over $23 million last year, and that doesn't include any profits from stock options that he exercised. The president of one of our subsidiaries exercised half his accumulated options shortly before the holidays, netting $50 million. I'll say it again, that's HALF his outstanding options --

And these are guys I see and talk to most every day. They wear buttoned-down plaid shirts and deck shoes to work when they're not expecting to meet with analysts or bankers. They're as approachable as anyone I know and honest to the core, not exactly the picture of the high flyers involved in the corporate scandals. In fact, I have great affection and appreciation for my company's leaders -- they're civic-minded, philanthropic, and they care about their employees' needs. We have one of the most generous profit-sharing plans in the nation, and one of the best benefits packages. So I have no axe to grind, no harbored resentments when I say the following.

It's absurd to believe that anyone is worth that kind of money. The justification, in the case of our Board, is that we made $1 billion in profits (yes, PROFITS) last year. And yes, just as in the sports and entertainment industries, it takes a similar level of compensation to keep that kind of management talent in the current environment.

What's wrong with this picture is the environment, the culture. And that's something that I have no idea how to fix. When the ratio of CEO compensation to average worker spirals to such astronomical levels at a time of stagnant wage growth for average Americans, there's obviously something wrong.

In 2004, the ratio of average CEO pay to the average pay of a production (i.e., non-management) worker was 431-to-1, up from 301-to-1 in 2003, according to "Executive Excess," an annual report released Tuesday by the liberal research groups United for a Fair Economy and the Institute for Policy Studies.

That's not the highest ever. In 2001, the ratio of CEO-to-worker pay hit a peak of 525-to-1.

Still, it's quite a leap year over year, and it ranks on the high end historically. In 1990, for instance, CEOs made about 107 times more than the average worker, while in 1982, the average CEO made only 42 times more.

It may not be a remedy, but it is a moral imperative: increase the minimum wage. A number of states are currently considering such a move. This should be a top-tier Democratic issue. And it shouldn't be relegated to the states. It requires national party leadership. It should be our war cry. If Bush and the Rethugs try to battle it in the face of their massive tax cuts for the uber-wealthy, they can only be perceived as what they truly are, the party that only cares about millionaires and corporate executives and has no care for the vast majority of Americans whatever.

I know polls demonstrate that Americans consider our most important problems the war in Iraq and the war on terra. They also indicate that the citizenry isn't giving Democrats much of a premium on caring for the average Joe. 2006 is the time to strike on both foreign policy issues and domestic ones. The Bush administration has given us a plethora of evidence of their incompetence at both. The Medicare drug benefit program is a fiasco, a giant deficit-builder designed as a payoff for insurance and drug companies with little benefit to the seniors for which it was presumably intended, FEMA's an ongoing story of failure, deficits are soaring, public services continue to be cut in Bush budgets, and the populace is starting to grumble.

The Bush blunders and scandals are so vast and numerous, though, that if Dems try to run on every single issue, we'll lose. Bush has proven the efficacy of a simple strategy: a few select themes hit on hard and continuously are all the public can ;process.

So here are ours:
1. Raise the minimum wage (and get minimum-wage workers out to vote!)
2. Restore competency and integrity to government.
3. Get out of Iraq and apply our resources to hunting down and prosecuting the real terrorists and securing our borders.
4. End the tax cuts to the wealthy and apply those revenues to fixing the real problems of Americans such as healthcare.

That should be enough if we stick to it and don't let ourselves get diverted by some kind of red herring like abortion or a flag-burning amendment. The Republicans are masters of distraction -- Democrats have to adhere to our own game plan this time and not spend all of our time responding to theirs.

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Anonymous Chuck Dupree said...

My last job in the software business was at Oracle, whose CEO is “worth” something in the range of $20 billion. His fortune is continually increasing because he has over 40,000 employees, and he steals from every one of them every day. Not to mention stealing from the customers by providing documentation that doesn’t attempt to explain how to use the software.

My feeling is that the progressive end of the spectrum needs to go back to using the class-war tools of early union organizers, constantly pointing out the disparities and inequalities, and the lack of any reason for same.

The problem is, to have an effect on the political calculus, such tactics need a political party in support of which the energy and anger can be mobilized. The DLC-ized Democratic Party cannot attract, and does not deserve, that energy.

It may be that the Democrats will have to fall even further before they change their ways. It may be that we will have to create a new party to focus this energy. It would be much easier to use an existing party structure; but I have to admit I’m skeptical that the Democrats will recover from having been bought.

1:46 PM  
Blogger Motherlode said...

I can't disagree with anything you say, Chuck. But I continue to support a progressive takeover of the Democratic Party in lieu of forming a third party. Third parties simply have no traction.

If the DNC falls any further, we'll have even more of a Republican oligarchy on our hands. And how will we recover if that happens?

No, the time to strike is now, and strike hard. Thank God for Howard Dean. The Joe Bidens of the world can't generate the energy necessary, but Dean can, and will, if we give him the proper support. You're right about the efficacy of early union organizer techniques -- that's what Dean is trying to utilize in his 50-state organization strategy.

BTW, I'm flattered that you even stopped by, since I read you regularly and you were one of my first five links when I established this blog.

2:14 PM  

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