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Among rank and file workers of major corporations, “CEO” is a four-letter word. That might not surprise you, but how about this: “CEO” has also become a four-letter word among corporate shareholders.
The top dogs routinely lift their legs on employees – knocking down wages, taking back health care and pension benefits, and offshoring jobs, even as the workers have dramatically increased productivity. Less known, however, is that the top dogs are also lifting their legs on the shareholders who own the corporations. What’s going on is that CEO’s have been fattening their own paychecks, which are paid by the shareholders, even when they deliver mediocre to miserable financial results.
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Angry shareholder groups have been demanding more say over these ridiculous executive pay packages. CEO’s have given a curt “no” to this demand, so Congress is now considering a very modest bill to give shareholders a voice. It would allow those who own the corporation to take a non-binding vote each year to express their approval or disapproval of the amount of their money that the top executives are taking in pay. Is that too much to ask?
“Yes!” shrieked the pampered CEO class. Owners should be seen, not heard, they insisted. The head of the lobbying front for executives of the biggest corporations rushed to Capital Hill to tell Congress that, “Corporations were never designed to be democracies.” He wailed that, “While shareholders own a corporation, they don’t run it.”
One corporate apologist even said that this attempt to rope in runaway pay packages amounts to “hounding” these fragile executive thoroughbreds. Imposing any outside restraints, he warned, will cause the CEO’s to leave the corporation and go elsewhere.
Now there’s an offer the shareholders should grab. Any CEO unwilling to let the owners have a non-binding say on executive pay is not to be trusted – and needs to be shown the door.
“House debates limlts on CEO pay”, Austin American-Statesman, March 9, 2007