As it turns out, crows are even smarter than we thought possible.
And CEOs at large U.S. companies have collectively captured more in compensation than we thought possible.
According to Reuters [ht: ja], 300 CEOs who served throughout the 2009-2013 period at S&P 500 companies together realized about $22 billion in compensation—that’s $6 billion more in compensation than initially estimated in annual disclosures—in the form of pay, bonuses and share and option grants, or an average of $73 million each.
To put those numbers in perspective, the AFL-CIO estimates that, in 2013, the CEO-to-worker pay ratio was 331:1.* That ratio was 46:1 in 1983, 195:1 in 1993, 301: 1 in 2003.
Like any ratio, the result depends on both the denominator and the numerator. The CEO-to-worker pay ratio has grown because, during the 2009-2013 recovery, workers’ wages have remained roughly unchanged while CEO compensation has soared. Thus, the combination of falling unemployment, growing productivity, and higher corporate profits and stock prices we’ve seen in recent years hasn’t helped workers but only the owners and executives of the corporations where they work.
“The numbers can be obscene, particularly when you look at the general challenges we face as an economy and society,” said Matthew Benkendorf, a portfolio manager at Vontobel Asset Management, which oversees about $50 billion.
We’ve long known that crows are pretty clever. Remember Aesop’s famous fable “The Crow and the Pitcher”? The thirsty crow drops pebbles into a pitcher with water near the bottom, thus raising the fluid level high enough to permit the bird to drink.
Do we really need to be any more clever to figure out that—as CEO compensation continues to grow, leaving workers and everyone else further and further behind—existing economic institutions have failed us and need to be replaced?
*The CEO-to-minimum-wage-worker pay ratio in 2013 was, of course, much higher—774:1