Last week the Economic Policy Institute (EPI) released a bombshell report that showed CEO pay skyrocketed while worker compensation barely budged over the course of the 2020 COVID-19 pandemic. This report comes on the heels of Sarah Anderson’s Institute for Policy Studies’ report that revealed just over half of 100 S&P 500 companies who pay the lowest median worker wages broke their rules to give their executives a raise during the pandemic.
It’s no surprise that last year workers experienced one of the worst years on record, but these reports detail the shocking length CEOs and executives went to ensure that they came out ahead. Thanks to unexpected stock market growth and some timely liquidation, CEOs walked away from this disaster richer than ever before, while their workers in many instances suffered during the course of the pandemic.
Examination in the EPI report found that even though many CEOs chose to forgo salary increases as part of public statements of goodwill during the pandemic, they actually were able to pocket a massive windfall by cashing in options and collecting vested stock awards, making their supposed display of solidarity with their workers nothing more than theater. By liquidating these assets, executive compensation was so great that CEO-to-worker compensation ratio significantly increased from 276.2 in 2019 to 307.3 in 2020.
EPI’s findings echo the March IPS study that revealed a similar story of C-Suite favored bonuses where the average CEO was compensated $15.3 million dollars in 2020, a 29 percent increase from 2019. Companies like Carnival, Tyson Foods, Hilton, and Chipotle all engaged in these ‘trickle up’ practices of boosting their executive pay while many of their low-wage workers suffered.
As experts and economists continue to analyze the effect the pandemic has had on the economy we are slowly understanding exactly how far the 1 percent went to enrich themselves. It’s clear that companies and their executives will do whatever they can to stuff their pockets at the expense of everyone else. If we want to stop the transferral of wealth to the 1 percent we need to enact targeted taxes like a wealth tax or a CEO pay tax that would encourage corporations to reduce the divides in pay between their CEOs and their lowest paid workers. It’s high time that workers got a piece of the pie.
The full EPI report is due this June.
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