Making Corporations Pay For Big Pay Gaps
Above Photo: From Ips-dc.org
For two full years now, publicly held corporations in the United States have had to comply with a federal mandate to report the gap between their CEO and median worker compensation. The resulting disclosures, this report makes clear, have produced truly staggering statistical results.
Americans across the political spectrum have been decrying the yawning gaps between CEO and worker compensation for several decades now. Yet Americans still, the research shows, vastly underestimate how wide these gaps have become. Today, with corporations required to disclose their pay ratios, the public can finally see the actual size of pay gaps at individual firms. These excessively wide compensation gaps hurt us on three major fronts:
- Corporate pay gaps help drive extreme inequality in the U.S.
- Wide pay gaps undermine business efficiency and effectiveness
- Runaway CEO pay endangers our democracy and the broader economy
- At the 50 publicly traded U.S. corporations with the widest pay gaps in 2018, the typical employee would have to work at least 1,000 years to earn what their CEO made in just one..
- Among S&P 500 firms, nearly 80 percent paid their CEO more than 100 times their median worker pay in 2018, and nearly 10 percent had median pay below the poverty line for a family of four.
- S&P 500 corporations as a whole would have owed as much as $17.2 billion more in 2018 federal taxes if they were subject to tax penalties ranging from 0.5 percentage points on pay ratios over 100:1 to 5 percentage points on ratios above 500:1.
- Walmart, with a pay gap of 1,076 to 1, would have owed as much as $794 million in extra federal taxes in 2018 with this penalty in place, enough to extend food stamp benefits to 520,997 people for an entire year..
- Marathon Petroleum, with a 714-to-1 gap, would have owed an extra $228 million, more than enough to provide annual heating assistance for 126,000 low-income people.
- CVS, with a 618-to-1 ratio, would have added a revenue stream that could have provided annual Medicare prescription benefits for 33,977 seniors.
- The report also includes the most comprehensive available catalog of CEO pay reform proposals.