Issue No 70 | 07 September 2000 | |
NewsGreed of the Fatcats
American Chief Executive pay has skyrocketed by 535 per cent during the 1990s according to a new report. Fatcat salaries far outpaced the 116 per cent rise in corporate profits and dwarfed the 32 per cent increase in average worker pay for the same period.
The survey looked at salaries from 1990 through to 1999. It was conducted by the Institute for Policy Studies and United for a Fair Economy. The study, reported in the Sydney Morning Herald, said that if US workers' pay had kept pace with that of their bosses, they would have averaged $US114,035 ($200,000) last year, instead of $US23,753. "Worker pay is starting to pick up but executive compensation is in outer space," said Mr Chuck Collins, co-director of United for a Fair Economy. The CEO/worker pay ratio has grown to 475-to-1 from 42-to-1 in 1980, Mr Collins said. Although he attributes part of the fat-cat pay explosion to stock options, "a big part of why we have runaway pay is our own version of what we accuse the Asians of: crony capitalism." Mr Collins said that came from too many CEOs sitting on their brethren's boards. "There's been a breakdown in the accountability chain" from shareholders, to the board, to management, he said. "You get rewarded whether you mess up or not." Mr Collins worries, too, about the broader social consequences. "Our society undervalues some people's contributions (teachers, public servants) to building a healthy and wealthy society and overvalues others," he said. (Barron's, Sydney Morning Herald; 4-9-00) A detailed paper on the changes in wealth distribution in the USA is available at http://www.levy.org/docs/wrkpap/papers/300.html Go to http://www.inequality.org/facts.html#income to find a wealth of information on such issues in the USA. In Australia, finding such a detailed analysis of CEO pay is not easy. Some work has been done. Tony Kryger from the Statistics Group at the Federal Parliamentary Library produced a research note < http://www.aph.gov.au/library/pubs/rn/1998-99/99rn24.htm> in 1999 using data from Cullen Egan Dell surveys. His study showed an increase in the average executive salaries from $ 112,104 in 1988 70 $237,470 in 1998 plus increases in allowances and benefits from $59,912 to $91,046. Bonuses increased from $12,247 to $59,533. Thus the average total remuneration went from $184,263 to $388,055. Kryger emphasises that the bonus payment figure are conservative estimates and do not take into account the increasing popularity of share options. Average weekly earnings for full time adult employees in Australia increased in the same time frame from $27,125 to $40,927. Note that average weekly earnings figures include the executive salaries. A very sad story for CEOs was in Business Review Weekly on 10 March this year. We learn that Australian manufacturing workers were earning only 56.3% of the average American manufacturing worker wage of $US 39,437. The poor old Aussie executive was much harder done by, receiving only $US518,794, a paltry 38.41% of the US executive average of $US1,350,567, according the Towers Perrin worldwide survey. http://www.brw.com.au/stories/20000310/5037.htm On a brighter note, the incentive component rose by 36% in 1999 compared to the previous year, and was valued at an average of $US100,000 (still well below the US average of $US450,000) and the total remuneration was up by over 20%. The World Socialist Web at http://www.wsws.org/articles/1999/nov1999/wage-n20.shtml has good summary showing some pay rates. Laurie Aarons great little book, Casino Oz (Goanna Publishing) provides a good analysis using ABS data and Rich List figures to show the rise in inequality. Frank Stilwell a few years earlier provided some excellent information in called Income Inequality: who gets what in Australia (Pluto Press). Terry Lane interviewed Ian Dunlop from the Australian Institute of Company Directors so its interesting to read his attempted justification of the rates these people get paid at http://www.abc.net.au/rn/talks/natint/stories/s67424.htm
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Interview: New Internationalism In its battle with Rio Tinto the CFMEU has pioneered global campaigning. National Secretary John Maitland talks to Workers Online about globalisation, a union response and using new technologies to organise . History: Pickets and Police S11 protestors would do well to be wary. Fred Paterson, CPA member of the Qld Parliament, was bashed by the Queensland police on St Patrick's Day 1948, when a Labor Government was in power in that state. Education: The WEF -Why Should We Care? An event like the World Economic Forum attracts all the spin doctors for every interest, often obscuring real issues. For educators the issues may seem remote but a closer look shows that services like public education could be dramatically affected by the unfolding agenda of global trade liberalisation says Rob Durbridge. Economics: A Vandalised Economy Since New Zealand was opened up to the forces of globalisation, it has performed dismally, both economically and socially. NZCTU Economist Peter Conway reports. Unions: Our Vital Role in Society Eight months into his new role as ACTU Secretary Greg Combet reflects on the challenges facing Australian unions. International: Turning Up The Heat John Sweeney of the AFL-CIO says the union movement can and will reform the global economy, for as Dr Martin Luther King taught us, the moral arc of history is long but it bends towards justice. Satire: Threat to withhold pocket money derails S11 protest MELBOURNE, Tuesday: Members of the activist collective S11 announced today that they had decided to cancel their protest at the upcoming World Economic Forum meeting at Crown Casino.
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