CEO's Did Great During The Pandemic - Workers Struggled

 

We have been given the impression that the pandemic caused everyone to suffer economically. That is true for workers and small businesses, but corporations and their CEO's did very well. 

Here is part of an article about this by Alexia Fernandez Campbell at the Center For Public Integrity:

Forty-one million people lost their jobs in 2020 as the pandemic ravaged the U.S. economy, the most layoffs in at least two decades. But CEOs had a pretty good year. A great one, in fact. 

CEOs at the largest publicly traded companies earned, on average, 351 times as much as the typical worker in their industry, according to a new analysis by the left-leaning Economic Policy Institute. That’s the largest gap since the stock market bubble peaked in 2000.

Those executives also got a handsome pay raise: 18.9% on average. Meanwhile, the typical worker (who didn’t get laid off) saw only a 3.9% increase in wages.

The pay gap between top executives and their employees has been widening since the 1980s, when CEOs made about 45 times as much as the median worker.

“The escalation of CEO compensation, and of executive compensation more generally, has fueled the growth of top 1% and top 0.1% incomes, generating widespread inequality,” wrote economists Lawrence Mishel and Jori Kandra, who authored the study. . . .

The new analysis focuses on a broad measure of CEO pay, based on the value of stock options when they were cashed out, not when they were awarded. It also measures pay using the value of stock awards when they were vested.

Mishel and Kandra analyzed executive compensation at the 350 largest public firms in the country, though their findings do not specify which companies had the widest pay differences. A recent report by the AFL-CIO labor federation does. It relies on a different measure of the CEO-worker pay ratio — one that’s reported by the companies themselves and includes part-time workers.

Businesses that rely on low-wage, part-time workers were among those with the largest pay disparities last year. Clothing retailer Abercrombie & Fitch had the biggest: CEO Fran Horowitz made 6,565 times more money than the company’s median employee. Chipotle Mexican Grill and The Gap also reported massive pay gaps. . . .

Mishel and Kandra propose several policies they believe will shrink income inequality. The first is simple: Congress could reinstate high top marginal income tax rates to reduce the incentive for executives to push for exorbitant compensation. Other options include raising corporate tax rates on companies with large pay gaps and allowing a firm’s shareholders to vote on compensation for top executives.