AFL-CIO Executive Paywatch highlights need for state tax reform, HEROES Act
SEATTLE (July 29, 2020) — The imbalance in the Washington’s economy between the pay of CEOs and working people continues to be a problem, as confirmed this year’s AFL-CIO Executive Paywatch report.
The Executive Paywatch website, the most comprehensive searchable online database tracking CEO pay, shows that in 2019, CEOs of S&P 500 companies in Washington received, on average, $12,634, 369 in total compensation. The average S&P 500 company CEO-to-worker pay ratio in Washington was 207-to-1. Nationally, CEOs of S&P 500 companies received, on average, $14.8 million in total compensation. The average S&P 500 company CEO-to-worker pay ratio was 264-to-1.
Washington’s highest paid CEO in 2019 was Microsoft’s Satya Nadella, who pulled in $42,910,215 in total compensation. The company with the highest CEO-to-worker pay ratio was Starbucks with an astounding 1,675-to-1 ratio after CEO Kevin Johnson raked in $19,241,950 versus median worker pay of just $11,489 in 2019.
“This report highlights a fundamental imbalance not only in Washington state’s economy, but also its tax system,” said Larry Brown, President of the Washington State Labor Council, AFL-CIO. “Rich CEOs are getting richer fast. But given our state’s upside-down tax system, they get a special break on paying taxes. Amid a pandemic and recession, our state and local governments are considering devastating cuts in services and jobs because there’s not enough revenue. If these CEOs and their wealthy peers paid their fair share, Washington could maintain the critical public services we need to get through this difficult time.”
According to this year’s Executive Paywatch report, the pay of S&P 500 CEOs has increased, on average, $3.4 million over the past 10 years. Meanwhile, during the same period of time, the average U.S. production and nonsupervisory worker’s pay increased just $8,360.
The data presented is particularly striking given that the COVID-19 pandemic has resulted in the highest unemployment levels since the Great Depression. Nearly 15 percent of workers were unemployed in April of this year compared to a high of 10 percent unemployment after the 2008 Wall Street financial crisis.
This year’s website shows the “1,000-to-1 Club Pay Ratio Companies that Furloughed Workers in 2020,” a new feature that shows the 20 companies with CEO-to-worker pay ratios over 1,000-to-1 that have furloughed substantial portions of their workforces due to shutdowns related to COVID-19. Those companies include Abercrombie & Fitch, Burlington Stores, The Gap, Dick’s Sporting Goods, Barnes & Noble, GameStop, Ross Stores, and Norwegian Cruise Lines.
With the COVID-19 shutdowns earlier this year, many CEOs took salary cuts as a token of their solidarity with furloughed workers, but their base salary makes up less than 8 percent of total compensation for CEOs of S&P 500 companies. At the same time, companies ramped up their equity awards to senior executives in the beginning of this year. During the past months, millions of working people have been furloughed or laid off due to shutdowns related to COVID-19.
“Working people in Washington state are being treated as disposable employees,” Brown said. “Now these cast-off workers, as a result of COVID-19, are at risk of having their unemployment benefits cut by Republicans in Congress. That’s why we are demanding that U.S. senators vote to pass the House-approved HEROES Act and provide the relief that working families need. The HEROES Act will extend unemployment insurance while keeping companies that paid more than $1 million in executive pay from getting refunds of previously paid corporate income taxes.”