Distributive Impact of Economic Growth and CEO Compensation Analysis
Explore the distributive impact of economic growth, focusing on pro-rich versus equitable growth, with evidence-based insights. Also, delve into the compensation of CEOs, examining salary, bonus, equity, and more in relation to worker wage levels and gaps.
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Presentation Transcript
Andrs Solimano Prague- November 2014
Distributive impact of economic growth: Pro-rich growth Equitable growth: more evenly distributed in the bottom 99 percent. What does the evidence say?
The United States United Kingdom Germany Sweden Russia China
Compensation of CEO: salary+ bonus+ equity+ Pension plan + medical insurance + severance payment (golden handshakes). Monetary compensation (MC)= salary + bonus Total compensation= MC+ rest Wage levels for workers and mid-level employees. Widening of wage gaps. Widening wage gaps.
CEO and workers pay in United States 2013: Selected Companies Annual Revenue (in billions) CEO Pay (Total Cash Compensation) Median Worker Pay CEO-to-Worker Pay Ratio Company 1 2 3 4 5 6 7 8 9 10 Exelon 11 General Electric 12 Goldman Sachs 13 Google 14 General Mills 15 Microsoft 16 Oracle 17 Nike 18 Twenty-First Century Fox 19 Prudential Financial 20 Pfizer 21 United Parcel Service 22 Walt Disney Source: CEO to Worker Pay Ratio at www.payscale.com $29.90 $127.40 $70.10 $100.10 $81.70 $48.00 $46.10 $42.70 $134.30 $23.50 $146.90 $41.70 $52.20 $16.70 $73.70 $37.10 $24.10 $27.70 $84.80 $61.20 $54.10 $42.30 $62.10 $52.97 $4,206,510 $7,155,536 $8,321,925 $1,951,918 $15,736,525 $4,661,912 $5,811,849 $6,982,706 $8,542,050 $3,000,783 $11,270,450 $8,623,759 $1 $3,512,107 $1,261,218 $1,547,057 $7,726,271 $20,899,150 $9,987,496 $5,652,550 $1,587,725 $17,038,538 $7,067,183 $5,498,426 $73,700 $71,300 $76,300 $55,400 $79,300 $52,400 $109,100 $48,300 $75,500 $88,100 $81,100 $87,700 $115,900 $66,800 $114,500 $104,500 $67,300 $77,900 $70,500 $93,700 $56,600 $60,300 $78,464 $70,484 57:1 100:1 109:1 35:1 198:1 89:1 53:1 145:1 113:1 34:1 139:1 98:1 0 53:1 11:1 15:1 115:1 268:1 142:1 60:1 28:1 283:1 102:1 86:1 3M AT&T AIG Bank Of America Boeing Coca-Cola Cisco Systems FedEx Ford Motor Average Average of full list
CEO payment in the United Kingdom: Selected companies (Financial Times Stock Exchange - 100 companies: 2010-2011) CEO remuneration as multiple of National Minimum Wage CEO remuneration as multiple of UK median earnings CEO remuneration (estimate) Company 1 2 3 4 5 6 7 8 9 10 Royal Dutch Shell 11 Barclays 12 Imperial Tobacco 13 Rolls-Royce Group 14 Antofagasta Minerals 15 Essar Energy 16 Hargreaves Lansdown Average of 100-FTSE Sources: "A third of a percent" report at www.equalitytrust.org.uk Note: CEO pay includes Basic pay (annual bonus, pension, supplements, golden handshakes, relocation, pension contributions, and long term share-based incentives. Reckitt Benckiser Vodafone BHP Billiton Marks and Spencer HSBC Holdings Royal Bank of Scotland Lloyds Banking Group Rio Tinto Anglo American 14,402,000 12,851,499 10,161,721 8,781,996 8,475,484 5,850,432 5,831,250 5,749,209 5,277,249 4,084,251 3,560,000 3,283,787 2,862,404 2,153,945 797,230 405,917 5,908,023 4,685,941 1,262 1,126 911 770 743 513 511 504 463 358 312 294 251 189 70 36 520 408 679 606 479 414 399 276 275 271 249 192 168 155 135 102 38 19 279 219 Average
Average CEO-to-worker pay ratio 2012 (US dollars): Selected countries Average CEO compensation Average worker compensation Country Ratio USA Canada Switzerland Germany Spain Czech Republic France Australia Sweden United Kingdom Netherlands Israel Japan Norway Portugal Denmark Austria Poland $12,259,894 $8,704,118 $7,435,816 $5,912,781 $4,399,915 $2,159,300 $3,965,312 $4,183,419 $3,358,326 $34,645 $42,253 $50,242 $40,223 $34,387 $19,630 $38,128 $44,983 $37,734 353.9 206.0 148.0 147.0 128.0 110.0 104.0 93.0 89.0 $3,758,412 $3,576,256 $2,189,104 $2,354,581 $2,551,420 $1,205,326 $2,186,880 $1,567,980 $561,932 $44,743 $47,056 $28,804 $35,143 $43,990 $22,742 $45,560 $43,555 $20,069 84.0 76.0 76.0 67.0 58.0 53.0 48.0 36.0 28.0 Source: American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) in http://www.aflcio.org/Corporate-Watch/Paywatch-Archive/CEO- Pay-and-You/CEO-to-Worker-Pay-Gap-in-the-United-States/Pay-Gaps-in-the- World
