I'm going to let you on a little secret about many of the CEOs of America's largest companies: the biggest decision that they make these days, is how best to divvy up the wealth that they've stolen from America's working families and middle class.
Seriously, according to
research by Lawrence Mishel and Jessica Schieder at the Economic Policy Institute, CEOs in America's largest firms are raking in an average of $15.5 million in compensation.
That's an average compensation of 276 times the annual average pay of the typical worker!
And that's DOWN from 2014, when the average CEO of America's largest firms earned 302 times the average pay of a typical American workers.
But don't feel too bad for the poor CEOs who are only earning $15.5 million as opposed to the $16.3 million they earned in 2014, because their earnings are still up over 46% since Barack Obama took office.
The fact is, CEO compensation only appears to be down because so much of their compensation comes in the form of stock options, which means that the market slowdown in 2015 is really the only reason that it looks like CEOs earned relatively less than they did in 2014.
Despite the market downturn and the decrease in top-CEO pay in 2015, the
average compensation for a CEO of one of America's largest firms is still up over 940% since 1978, back when CEOs "only" earned about $1.5 million per year, roughly 30 times more than the average worker.
In Mishel and Schieder's analysis, they point out that most major CEO's simply extract wealth from the economy without adding to the economy in any truly productive manner.
They write that "We have argued that high CEO pay reflects rents - concessions CEOs can draw from the economy not by virtue of their contribution to economic output but by virtue of their position. Consequently, CEO pay could be reduced and the economy would not suffer any loss of output."
And that tells us something very important, and very troubling: right now we're living in another gilded age, and the CEOs of the largest American corporations are nothing but 21st century robber barons.
While CEO pay has increased by over 940%
since 1978, average worker pay has only increased by 10.3%, meaning that while top CEOs have seen their earnings go up by $15 MILLION a year since 1978, average workers are only earning about $5000 a year more on average.
It wasn't always this way, as you can see in
this graph, CEO pay didn't start tracking to the stock market until the early 1980s.
As economist
JW Mason points out, one major reason for the change was the "shareholder revolution" in the early 1980s, when incentives under the Reagan administration made it so that companies became more interested in buying back their own stock from the public than they were in investing in new projects or hiring American workers.
That turn towards stock buybacks and away from reinvestment in making companies grow disconnected stock value and dividend payouts from real economic output, and priced out smaller investors while concentrating wealth and voting power into the hands of a few economic elite who serve as corporate executives and board members.
But up until
1993, the top CEOs still "only" made between 50 times and 90 times what a typical worker would make.
Then, Bill Clinton and Congress passed a law placing a $1 million cap on how much a company can deduct for executive pay as a business expense.
And that sounds like a good plan, because it places a hard limit on how much a firm can pay out to its executives before taking on giant tax burdens.
But there was a huge exception written into the law that made the stock buyback situation even worse.
