The Outrageous Ascent of CEO Pay

The Securities and Exchange Commission just ruled that large
publicly held corporations must disclose the ratios of the pay of their top
CEOs to the pay of their median workers.

About time.

For the last thirty years almost all incentives operating on American
corporations have resulted in lower pay for average workers and higher pay for
CEOs and other top executives.

Consider that in 1965, CEOs of America’s largest corporations
were paid, on average, 20 times the pay of average workers. 

Now, the ratio is
over 300 to 1.

Not only has CEO pay exploded, so has the pay of top executives
just below them. 

The share of
corporate income devoted to compensating the five highest-paid executives of
large corporations ballooned from an average of 5 percent in 1993 to more than
15 percent by 2005 (the latest data available).

Corporations might otherwise have devoted this sizable sum to research
and development, additional jobs, higher wages for average workers, or dividends
to shareholders – who, not incidentally, are supposed to be the owners of the

apologists say CEOs and other top executives are worth these amounts because their
corporations have performed so well over the last three decades that CEOs are like star baseball players or movie stars.

Baloney. Most CEOs haven’t done anything special. The entire stock market surged over this time. 

Even if a company’s
CEO simply played online solitaire for thirty years, the company’s stock
would have ridden the wave.  

Besides, that stock market surge has had less to do with widespread economic gains that
with changes in market rules favoring big companies and major banks over
average employees, consumers, and taxpayers.

Consider, for
example, the stronger and more extensive intellectual-property rights now enjoyed by major corporations, and the far weaker antitrust enforcement against them. 

Add in the rash of taxpayer-funded bailouts, taxpayer-funded

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