CEO pay is irrelevant when it comes to worker pay.
At least now the AFL-CIO has it right. They talk about total compensation and they clarify its CEO pay of S&P 500 companies they are referring to.
While I certainly don’t defend all CEO pay and logic tells me they are not all worth their compensation, this kind of information is extremely misleading and unnecessarily inflammatory.
From the AFL-CIO
Too many working families are struggling just to make ends meet—to afford the basics, like child care, groceries and rent. All the while, CEOs are paying themselves more and more and more. In 2018, CEOs of S&P 500 companies received, on average, $14.5 million in total compensation. CEO pay matters—that’s why we compiled our Executive Paywatch report.
For example: Look at the CEO of Verizon. His cash compensation was $4,987,635. Verizon has 144,500 employees. The cash pay equals $34.51 per worker. The total compensation equals $153.67 per worker. Based on what I can find the average hourly worker earns $16-$18 a hour at Verizon. So at $17.00 that’s annual pay of $35,360 which means if they got their share of the CEOs entire compensation they would receive a raise of 0.043% or $0.073 per hour. On average 2/3 of CEO compensation is stock typically having no immediate value, but with potential, including lower value.
Keep in mind too that an increase in pay is not dollar for dollar. You raise pay by a $1.00 then add all employer paid state and federal payroll taxes and employer related costs for employer benefits.
What we need to be fair are more profit sharing and stock award plans for all workers.