Are meager unemployment benefits too generous? Is a weekly stipend of $300 causing some unemployed workers to stay at home? Is it time for Congress to crack down on scroungers who may be gaming the system because they would rather subsist on $1,200 a month than expose themselves to a deadly virus by staffing a deep fryer for pennies an hour?
As questions like these preoccupy many of the country’s leading lawmakers, newly compiled research underscores the extent to which America’s CEOs have enjoyed a year of plenty as essential workers face high infection rates, high unemployment, and faltering wages. The analysis, published earlier this week by the Institute for Policy Studies (IPS), reveals that more than half of the hundred largest low-wage employers gave chief executives pay rises averaging 29 percent while frontline workers earned 2 percent less. Not only that, but many firms actively rewrote their own compensation plans so that executives would receive inflated pay during the pandemic.
As the report points out, more than five hundred publicly-traded companies trumpeted cuts to the base salaries of their CEOs in 2020, often to great media acclaim. Performative gestures like these, however, obscure the fact that base salary generally makes up only a small percentage of executive compensation. With rules and performance benchmarks often rigged to bloat bonuses, the result has ultimately been record pay for CEOs at a time when worker pay is stagnating and workers themselves are at unique risk of infection.
Of the top hundred companies listed in the S&P 500, the report finds that some fifty-one modified their pay practices in 2020 following the pandemic’s onset to boost the value of executive compensation packages — the techniques including lowered performance bars, special “retention bonuses,” and the exclusion of second-quarter results from CEO performance evaluations. The upshot? At the various companies who engaged in these measures, CEO pay averaged $15.3 million — an increase of 29 percent since 2019 — while median worker pay dropped 2 percent to an average of $28,187. The CEO-worker pay ratio at these fifty-one firms, meanwhile, averaged 830 to 1.
Some firms, of course, vastly exceeded these averages. Hilton Hotels CEO Christopher Nassetta, for example, got a payout of $55.9 million: 1,953 times his company’s median worker pay of $28,608. Between 2019 and 2020, Hilton fired or laid off some 32,000 workers while its median pay dropped from $43,695. As IPS researchers point out, Nassetta himself failed to meet designated performance goals, but the company’s board ultimately concluded that depriving him of a massive payout would have “impaired the awards’ ability to retain key talent and align our management team with the actions needed to drive long-term performance.”
This sentiment is absurd on its face. But it also makes for an incredible contrast with recent suggestions that getting a few hundred dollars a week may be creating a “disincentive” for able workers to seek out employment. As ever, America’s wealthiest people will apparently lose their work ethics without multimillion-dollar personal windfalls while its poorest will not gain them back unless a few hundred dollars are taken away.
Even without their arbitrarily reconfigured compensation schemes, of course, many of America’s top corporate executives would have still made a killing. As in so many areas, the pandemic has merely shown us a heightened version of what’s considered politically and economically “normal.” Essential workers dying from COVID, being laid off in record numbers, and having their wages slashed while CEOs literally see the company rules rewritten so they can receive even bigger payouts? You can’t make this stuff up.