America’s Corporate Inequality Problem

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Many of the reforms contained in Dodd-Frank — passed nearly three years ago, now — have yet to be written as clear-cut regulations through the complicated federal rule-making process. One of these rules would require corporations to disclose the pay gap between workers and CEOs. Although executive compensation disclosure has been an SEC requirement since the early 1990s, median worker pay has not — and not surprisingly, corporate lobbyists have been working hard to make sure that reform doesn’t see the light of day.

(AP Photo/Mark Lennihan)

When (and if) a rule is written, shareholders will have hard data about the dramatic inequalities that exist within corporate America. In the meantime, Bloomberg News posted a chart of the top 250 S&P 500 companies with the highest estimated pay gaps for 2012. Since average worker pay is not usually available — thus the need for the new rule — Bloomberg used an “estimate of industry-specific rank-and-file employee compensation calculated from government data” to come up with the typical worker to chief executive pay ratios.

At the top of their list? JC Penney’s recently departed CEO Ron Johnson raked in an estimated 1,795 times what the average retail worker made in 2012. Also rans include Starbucks CEO Howard Schultz, who made 1,135 times the average worker and David Novak, CEO of Yum! Brands — the company that manages Taco Bell, KFC and Pizza Hut — who made 819 times as much.

JC Penney data

Click to view Bloomberg's chart of CEO vs. worker compensation for Standard & Poor’s 500 Index top 250 companies.

All three CEOs — and many others — received paychecks and benefits in the millions, while the median worker at their company likely earned less than $30,000 annually. In fact, the average multiple of CEO-to-typical-worker compensation among the companies Bloomberg looked at increased 20 percent since 2009, even as the country has struggled to recover from the recession.

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  • pgk

    Let’s also look at the historical ratio of avg employee to CEO wages. I believe in the 80′ that number was about 50!

  • Albatross

    If a man hoards newspapers in his apartment until there’s no room to move we say he’s crazy. If a woman has 100 cats in her trailer home we say she’s nuts. But when somebody hoards so much wealth that the nation can’t fix bridges and children go hungry, we put him on the cover of Forbes and call him “a success.”

  • Anonymous

    Big shock, CEO’s are greedy pukes.

  • MamaC

    And JCP is always in the news these days due to its imminent bankruptcy …

  • Cuppa Joe

    Thanks, Reagan! He began the thrust for making it easier for execs to rob the rest of us. Then, Bush I and Bush II finished the job, pure and simple.

  • Paulitime

    It’s sick how greedy these executives are. There are companies in Japan where the CEO cannot make more than 10 times the amount of the lowest paid worker. Fat chance of seeing something like that happening here.

  • Claire Wilson

    I’d like to see a similar list comparing publishers’ salaries with the meager wages they pay the poor slaves who write and edit their publications.

  • David Allan Cole

    So who decides to pay these Pukes that much?

  • Patricia Shultz Stewart

    JCP is just plain stupid – they overpaid this jerkoff to run their company into the ground, fire the entire board!

  • David McElroy

    These greedy corporatists are simply pirates in pinstripes! They will often complain that Americans don’t want to work, but conveniently forget the work ethic is predicated upon earning your keep. When the wages of work are no longer sufficient to pay one’s keep, the motivation to labor vanishes with just cause. These CEO’s have stripped America of her assets, eliminated millions of jobs, and sent manufacturing overseas in pursuit of their own multi-million dollar bonuses. America had become great and prosperous due to the large skilled labor force that was hugely productive through the 1960’s. CEO’s just rake in the dough pushing papers. Corporate raiders like Mitt Romney are their idea of the profitable CEO, getting big pay-offs for terminating worker’s employment.

  • Robert H. Pike

    I wonder if Ellen is aware of this – I bet this will piss her off…

  • hopeful

    I’m all for hardworking, enterprising folks being rewarded monetarily. But this is just GREED. Here’s a clue – remove the top guy – take his salary and use it to lower your prices – guess what – you WILL get more customers.

  • Janusz Maciuba

    It is up to the shareholders to revolt and demand some of this overcompensation as dividends. Over a million a week? And JCP going down the tubes due to complete lack of any retail instinct of the part of management. I’ll do the job for $100,000 a week and only wear JCP clothes. Even the flyers are lame: the end of ‘ladies’ is underwear on the left page which should lead to men’s underwear on the right page. There is a reason for the juxtaposition.