There is a bill currently in Congress that would require companies to provide a simple comparison of what the CEO earns and how this compares to the pay of average employees.
Sounds simple, right.
No this is controversial stuff. Some Republicans in Congress call the comparison between the chief executive’s pay and everyone else in the company “useless.”
So a group backed by 81 major companies, including McDonald’s, Lowe’s, General Dynamics, American Airlines, IBM and General Mills, is lobbying against this proposal.
According to a study by MIT and the Federal Reserve, executive pay at the nation’s largest firms has more than quadrupled in real terms since the 1970’s even as pay for 90% of America has stalled.
Remember, this isn’t a labor union study. It’s done by MIT, the Federal Reserve, the University of California and published in the Washington Post.
In 1979 the average executive pay at the nation’s top companies was 28 times the average worker’s income. By 2005, executive pay had jumped to 158 times that of the average worker.
I’ve just lost any shred of objectivity. This is insane.
But don’t just look at it from the point of view of an employee. Don’t investors need to know these numbers? To see how much executives are gilding their own pockets?
Call me old school, but I believe that sunlight is the best disinfectant. Let’s hope that Congress doesn’t allow this information to see the light of day.
About the Author: Bob Rosner is a best-selling author and award-winning journalist. For free job and work advice, check out the award-winning workplace911.com. Check the revised edition of his Wall Street Journal best seller, “The Boss’s Survival Guide.” If you have a question for Bob, contact him via [email protected].