Society

Study: CEOs Make 335 Times More Than Workers

| by Nik Bonopartis
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America's top chief executive officers earn 335 times as much money as the average office drone, according to a new study.

The study, by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), a national labor union, looked at compensation figures for the CEOs of companies indexed on the Standard and Poor's index, the S&P 500.

Those CEOs earned an average of $12.4 million a year, while the average non-supervisory worker at those companies earned only $36,875. The study found that the more a company avoids paying taxes -- through loopholes and offshore tax havens -- the higher its executives are compensated.

Joel Kiani, CEO of medical equipment company Masimo Corp., tops the list at $119,222,614 in compensation in 2015, according to the AFL-CIO. Other top-paid executives include GoPro CEO Nicholas Woodman, who earned $77,427,175, CBS head Leslie Moonves, who earned $56,773,822, and Viacom's Philippe P. Dauman, who took home $54,154,312.

“The income inequality that exists in this country is a disgrace," AFL-CIO President Richard Trumka wrote in a statement. "We must stop Wall Street CEOs from continuing to profit on the backs of working people."

CEOs on the "low" end of the list include Starbucks executive Howard Schultz and Sprint's Marcelo Claure, who at $20,091,353 and $21,798,463, respectively, earn about the same as top-tier MLB pitchers, and more than max-contract NBA players.

In addition to focusing on executive pay, the AFL-CIO report named the top corporate tax dodgers, measured by the amount of "unrepatriated profits" -- profits that are earned by U.S. companies, but are kept overseas to avoid U.S. corporate taxes. Apple leads that list, avoiding taxes on more than $200 billion in revenue, the study says. That's equal to about two years' gross profits for the technology company.

Overall, American companies kept about $2.4 trillion in profits offshore in 2015, according to the report. If those profits were taxed, the AFL-CIO argues, the resulting windfall would be enough to purchase a new hospital, high school, library, day care center, fire station and community center for about 8,000 American towns and cities.

The report also faulted executives like Mondelez CEO Irene Rosenfeld, who earned almost $20 million and is pushing the company to fire U.S. workers and transfer the jobs overseas.

"It’s shameful that a CEO can make that type of money and still destroy the livelihood of the hard-working people who make the company profitable,” Trumka wrote.

Critics like the Manhattan Institute's James Copland dismissed the report, calling the information "useless" based on the opinion that executives and regular employees are in two different labor markets.

Regular employees can be replaced easily, Copland told Reuters, while CEOs are "much harder to substitute."

Sources: AFL-CIO [2], Reuters / Photo credit: Jericho/Wikimedia Commons

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