In the wake of the 2008-09 Wall Street crash that led to the Great Recession, Congress passed the Dodd-Frank financial reform law. That law was supposed to prevent “Too Big To Fail” from happening again and provide myriad consumer protections, but lobbying by big banks has prevented many of the rules from being written, even three years after its passage.
One such delayed provision requires public companies to provide details of CEO compensation relative to employee pay. Lobbyists have thus far been successful in blocking that rule, so Bloomberg News went ahead and calculated them anyway. From their report:
Most companies don’t disclose median worker pay, so Bloomberg calculated ratios based on the U.S. government’s industry-specific averages for pay and benefits of rank-and-file workers.
The most egregious disparity is JC Pennys CEO Ronald Johnson, who earned $53,300,000 in 2012, or 1,795 times that of the average retail employee. Johnson’s pay was clearly not linked to performance, as evidenced by JC Pennys low stock price and his ouster after just 17 months.
If you ever wondered how a country as wealthy as America could have millions of citizens working full-time but still living in poverty – here’s your answer.