CEO compensation is repulsive

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    It is possible that in group projects, certain members of the group can be twice as efficient as other members and can do more work in helping the group reach its end. And it’s only fair that those who have done more work or who have been more efficient should be compensated more for that work.

    But it is impossible to find a worker who is 62 times more efficient than another worker, who does 62 times more work than another worker or whose work is 62 times more important than the work of others.

    Yet in terms of compensation, CEOs make 62 times more than the average worker in terms of their bonuses alone, according to a March 18 post in Time Magazine’s The Curious Capitalist.

    It is beyond shameful that at a time when average Americans are struggling to make ends meet, CEOs are making obscene bonuses. The CEOs will tell you that they deserve these bonuses because stocks prices and earnings are up. But if this warrants better pay for CEOs, why does it not warrant better pay for employees?

    Compensation for the average worker has not gone up, according to the same post. Citing a March 17 Bureau of Labor Statistics report, the average hourly compensation for workers has actually gone down by 0.5 percent in February. The average worker makes $40,672, which is up by 2 percent from last year, but when adjusted for inflation, it is just $0.58 more a week.

    So at a time when the pay for average workers is stagnating, 50 CEOs’ incentive pay has jumped by 30 percent in 2010, according to a Wall Street Journal article, and that’s on top of their base pay.

    A prime example of this would be what has happened at Walt Disney World in Florida. According to the Time article, Disney CEO Robert Iger received a $13.5 million bonus, which was 45 percent larger than the bonus he received in 2009. A Disney spokesperson said this was due to the shareholder’s return having risen 24 percent.

    The workers at the theme park fought for months for higher wages and got a new contract with an average annual wage increase of 3 to 4 percent as well as a bonus of $650 8212; that bonus is 20,769 times smaller than Iger’s bonus.

    At a time when, according to a Federal Reserve report cited in a March 28 CNN.com article, household wealth decreased $125,000 in 2007 to $96,000 in 2009. The average worker’s pay has stagnated. It is completely ludicrous that only CEOs should benefit from the rise in stock prices when the rest of the country is struggling.

    And it is not even as if the CEOs of these companies are investing in the United States as they say they are. General Electric, the largest corporation in the nation, has eliminated a fifth of its U.S. workforce while increasing its employment overseas, according to a March 24 article from The New York Times.

    Also, GE is not eliminating U.S. jobs due to taxes 8212; GE paid no taxes in the U.S. in 2010 despite making a profit of $5.1 billion in America, according to the New York Times article.

    So companies are shipping jobs overseas, avoiding paying taxes due to loopholes and tax shelters in the U.S. tax code and rewarding CEOs immensely while the rest of the country is still in tough economic times. Apparently, these companies have the money to give their CEOs sizable increases in their bonuses but don’t have the money to invest and hire in the U.S.

    There needs to be a shift in how the compensation and burden is shared in the United States. Americans all over the country are being told they must make sacrifices for the betterment of the nation, but apparently that doesn’t extend to the CEOs of large and lucrative companies.

    The companies have their tax breaks, their tax loopholes and their tax shelters, yet they still refuse to hire in the U.S. or pay their employees better. Americans continue to struggle to make ends meet and watch as their pay stagnates and as CEO bonuses grow larger and larger.

    The rich continue to get richer and the rest of the United States gets poorer, and the only way I can think of to describe this entire situation is repulsive.

    Jordan Rubio is a freshman broadcast journalism major from San Antonio.