America ’s CEOs are still raking in the big bucks and leaving shareholders and workers to pay the tab. The median year-on-year total CEO pay rose 30 percent in 2004. The average increase was a whopping 91 percent, according to researchers at the Corporate Library. They expect total CEO pay to increase another 30 percent in 2005, too. The ratio of average CEO pay to production worker pay jumped from 301-to-1 in 2003 to 431-to-1 in 2004 according to the report “Executive Excess” for United for a Fair Economy.
It’s also bonus time for the big players. How about a $11.5 million bonus for Morgan Stanley CEO John Mack for just five months on the job? Or how about $38 million for Goldman Sachs CEO Henry Paulson? He only got a $30 million bonus in 2004.
Have you started thinking about paying your taxes for 2005? It would be a no-brainer if you were a big CEO. The new rage in hidden CEO perks is “gross-ups.” More than half of the nation’s largest companies now give their top executives extra money, or gross-ups, to cover personal taxes on corporate perks and other income.
Home Depot CEO Robert Nardelli got about $3.3 million in gross-ups to cover his taxes on a luxury car, family travel on Home Depot jets and forgiveness of a $10 million loan, according to a report commissioned by the Wall Street Journal.
House Democrats have introduced HR 4291 – The Protection Against Executive Compensation Abuse Act. The bill requires more disclosure in annual reports of top executive compensation including pensions, golden parachutes and other perks.
The social and economic fallout from Wal-Mart’s low wages, poor benefits and worker abuse are featured in a rebroadcast of PBS’s Frontline documentary, “Is Wal-Mart Good for America?” on Tuesday, January 3, 2006. Click here to see when this one-hour special, one of the highest-rated programs in Frontline history, will air in your community.
The program examines how Wal-Mart is setting a corrosive example for other large retailers to follow and is changing the balance of power in the business world. Union members are featured throughout the program, which also shows how the giant retailer’s pressure on suppliers has driven jobs from once-solid American companies to low-wage operations overseas. You can learn more about the program on Frontline’s website.
The U.S. House of Representatives finished its legislative business for 2005 without concluding action on a highly controversial $56 billion package of tax cuts. More than 84 percent of the House tax cut bill would go to households in the top 20 percent of income.
Meanwhile, the House approved more than $40 billion in spending cuts to vital working family programs, including health, education, child support and other programs.
The Senate passed a similar but slightly smaller tax cut bill with help from Vice President Dick Cheney, who cut short an overseas trip to fly back to Washington, D.C., and cast the deciding vote (51–50) in the Senate. GOP leaders said they expect the final version to be hammered out by January and preserve the major House tax cuts for the wealthy, including capital gains, dividend and business tax cuts.
The Senate reconvenes on January 18, 2006 and the House of Representatives returns on January 26, 2006.
A new poll by Peter D. Hart Research Associates finds more than half of voters surveyed now think the United States is on the wrong track, while only 29 percent think the nation is moving in the right direction. In the same poll, respondents said Congress and the President are out of step on the issues that most concern working families.
The public’s concern goes beyond the war in Iraq and includes key domestic issues as well. In five key areas, respondents said the nation was on the wrong track: health care (69 percent), retirement security (65 percent), fair taxes (57 percent), education (53 percent) and jobs and the economy (47 percent). The survey also found that 63 percent of seniors ages 65 and older were dissatisfied with the new Medicare prescription drug benefit plan.
After enduring more than a decade of mismanagement, shareholders of Maytag Corp. voted on Dec. 29 to approve the sale of the legendary company to rival appliance-maker Whirlpool for nearly $1.79 billion in cash and stock.
The move follows a steady decline in the company’s share price from nearly $70 in the 1990’s to its current price of less than $20 per share. Maytag CEO Ralph Hake drew national scorn in 2004 for his decision to move refrigerator production from Galesburg, Illinois to Reynosa, Mexico, a move that devastated the heartland community and put 1,600 IAM members out of work.
Under terms of the sale, which must still be approved by federal regulators, Hake will receive stock option grants worth $1.4 million in addition to bonuses and benefits worth more than $10 million.
“The community lost, the shareholders lost, every stakeholder lost – except for Ralph Hake and other top management,” said Grand Lodge Representative Cristina Nedrow, who attended the Maytag shareholders meeting.