We decided a long time ago that citizens needed to be protected from our free enterprise system with minimum wage laws. With OWS focusing attention on corporate greed and abuse, I think it's past time we protect our citizens from our free enterprise system with maximum wage laws.
I've been miffed since I read quaoar's diary on Monday CEO who laid off thousands gets $37 million retirement package. Craig Dubow, CEO of Gannett, is retiring at that tender age of 56 (in fairness, he apparently has chronic back and hip problems). He has been CEO since 2005, so in recognition of his 6 years of leadership he is being rewarded with a retirement package of $37.1 million in compensation and benefits. Yes, that is correct - thirty-seven million dollars, to retire one executive. Well, to be fair, Mr. Dubow must have made Gannett many times that in increased profit. Right? Um, well, actually, no. Since Dubow became CEO, Gannet's annual revenue from print advertising has plunged from $5.2 billion in 2005 to $2.7 billion last year. To help offset the falling revenue, Dubow oversaw 20,000 jobs cuts and unpaid leaves for its remaining workers. Well, the newspaper / print media business has suffered in this economy as folks look for things to cut back, and turn more and more to the internet for their news. But with shutting unprofitable newspapers, shedding so many employees Gannett stock price must be on fire, right? Well, not exactly - Gannett's stock closed Thursday at $10.45, an 85 percent decline since July 2005 when Dubow took over as CEO. So, if they reward a CEO that led an almost 50% decline in revenue and 85% decline in value of the company with 37.1 million, what the hell do they pay successful CEOs who actually increase revenue and company value???
Well, Gannett Corp. seems to be especially obscene in executive compensation. But according to the AFL-CIO, the average annual compensation for a CEO of an S&P 500 company for 2010 was $11.4 million, in actual salary, stock & option awards, bonus & incentive, and pension & deferred compensation - but does NOT include benefits such as medical & life insurance, vacation, travel, etc. For a 40 hour workweek that is $5,460 per hour, or $43,686 per day . And that's an increase of 23% over 2009. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act does have new tools to help limit runaway CEO pay. Shareholders now have a “say-on-pay” vote on executive compensation, and companies must disclose the ratio of CEO-to-worker pay at each company.
But let's put that in another perspective: A President of the United States earns $400,000 per year. Does it make any sense at all that an average S&P CEO makes over 28 times what the leader of the world's largest economy makes? Does it make one iota of common sense that the average CEO gets paid 28 times what the guy who has the launch codes to start WWIII and Mutual Assured Destruction makes??
Dodd-Frank is a good start, but I suggest we tie in a Maximum Wage Law with the Minimum Wage Law. Currently the average S&P 500 CEO makes over 750 times the federal minimum wage of $7.25 per hour. Why don't we start with a Maximum Wage Law of 500 times minimum wage? The poor CEOs would still get over $3,600 per hour, $7.54 million per year. Then we'll phase it down - I think 100 times minimum wage is more than fair. After all, it's not really the corporation paying this obscene executive compensation, it's you an me - we pay it every time we buy a tank of gas, spend 50 cents for a newspaper, or buy a Big Mac.