Peace & Justice

This is the blog of the Commission on Peace and Justice for the Roman Catholic Diocese of Albany, New York.

Monday, October 14, 2013

Executive compensation

The Philadelphia Inquirer recently editorialized about the growing gap between business executives and their employees, and a proposed rule from the Securities and Exchange Commission that would require publicly traded companies to compare chief executive compensation with median employee pay. Among the interesting facts:
The gap between rank-and-file and executive compensation has widened steadily for decades. In 1965, executives were paid an average of 20 times workers' salaries. Today, according to the Economic Policy Institute, they make more than 277 times their employees' pay.  
Although the average pay of the nation's top 200 executives is $15 million, according to an analysis by the firm Equilar, they have not performed at a very high level for many firms. Between 1993 and 2012, more than a third of the companies run by the 25 highest-paid executives fired them for poor performance, had to be bailed out by taxpayers, or were charged with fraud, according to the Institute for Policy Studies' report "Executive Excess 2013: Bailed Out, Booted, and Busted. The study concluded that lavish compensation "encourages high-risk behavior and lawbreaking at the expense of taxpayers and investors."
You can read more here.

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