America's economic recovery benefited one small, exclusive group since 2009: The Guardian reported:
While CEOs have seen their compensation soar by 54%, the typical worker’s paycheck hasn’t budged.This occurred under America's first black President. The next two legs up on CEO compensation could come from companies jettisoning their employer provided health insurance benefit and Obama's new free trade agreements.
The CEO class is already shifting the burden of soaring retiree health care to people on fixed incomes. PPACA's aim was to transfer health care coverage from employers to a tapped out Uncle Sam and individuals, i.e. the very people with no raises for the last six years.
As for free trade being the tide that lifts all boats:
Globalization has fostered better living conditions in the developing world. But improving the lives of Indonesian peasants willing to work for desperately low wages really has nothing to do with the decisions that closed some 63,300 American factories between 2001 and 2012.America's CEOs made these decisions to shed American jobs, which happened to optimize executive incentive compensation. It's a club where executives and large stock holders sit on each others boards and compensation committees:
Investors – whose representatives on the board of directors have the final say on CEO compensation – seem to become complacent during bull markets, indifferent to how rich CEOs, too, are getting, as long as they are sharing in the riches.It's not complacency but bad management theory. Board members assume one person or a small group of executives are responsible for the companies overall performance. They hire compensation consultants who push extrinsic motivations schemes as the only way to get supposedly professional people to perform.
Average CEO compensation package is 303 times the size of the average earnings of their employees. The late management consultant Peter Drucker (who, as a winner of the Presidential Medal of Freedom, was no foe of capitalism) recommended that a CEO-to-worker pay ratio should never top 25; otherwise, he argued, they would “increase employee resentment and decrease morale”. By 2005, when Drucker died, the ratio was closing in on 400:1.
Employee resentment? Check. Low morale? Check. But neither has mattered much to the compensation committees signing off on CEO packages.
The club signing off on executive pay schemes is the same club that dealt with the Obama White House on PPACA and his super-sized trade giveaways. It's the same PEU club that monetizes assets by placing them in limited partnerships, charging management fees, borrowing to pay themselves dividends and then reselling the venture for a final profitgasm.
I've written many times about the race to the lowest global common denominator on worker pay/benefits, taxes and regulation. CEO pay is excluded, with two more potential boosts on the horizon. President Obama will have delivered both. His Presidential outcomes are worthy of his idol, Ronald Reagan.
Something is rising across America. It's CEO pay.
Update 5-30-23: HuffPo's "The Golden Age of White Collar Crime" stated:
32 percent of American managers said they were comfortable behaving unethically to meet financial targets.
