American Millionaire CEOs Had 29% Pay Rise While Workers’ Pay Decreased During Pandemic
The bosses of some of America’s worst paying companies saw their earnings increase during the pandemic while their workers lost out, a new report has revealed.
According to the Institute for Policy Studies, the millionaire CEOs netted an average pay rise of 29% in 2020, whereas their employees saw wages decrease by 2%.
The report looked at financial information from the 100 companies on the S&P 500 index with the lowest median wage for workers, many of whom were designated essential workers, requiring them to continue to show up to their jobs at the height of the pandemic.
By keeping their businesses open the CEOs of these companies were the ones to profit, netting an average salary of $15.3m in 2020. And despite the worsening economic forecast over the past year, they also benefitted from improved bonuses and relaxed performance targets. That picture stands in stark contrast the situation for their employees, who on average saw their already low wages decline further to a median of $28,187.
Of the businesses analysed in the report, The Guardian reports that it was Hilton’s CEO Christopher Nassetta who took home the biggest pay packet, earning $55.9m in 2020 in spite of the devastation experienced by the hotel industry. Meanwhile, Hilton employees saw their average wage drop from $43,695 to $28,608 in the space of a year.
Elsewhere, Pizza Hut, KFC and Taco Bell parent company Yum Brands’ CEO David Gibbs earned $14.6m, despite having donated his annual $900,000 salary to pay for $1,000 bonuses for general managers at Yum Brands stores. Instead, the Yum Brands board gave Gibbs a $1.4m cash bonus, as well as $880,000 in stock grants, while the company’s workers made do on median pay of just $11,377.
Gibbs isn’t the only CEO to benefit from generosity from his company in the face of economic uncertainty. Chipotle’s board removed COVID-related financial costs and performance when deciding on their CEO’s compensation, which ended up being some 2,898 times more than what the average worker at the company was paid in 2020.
Following the publication of the report, the Institute for Policy Studies urged lawmakers to back the Tax Excessive CEO Pay Act – a bill introduced by Senator Bernie Sanders earlier this year which attempts to force companies to narrow the wage gap between their highest earners and lowest paid employees.
In a statement following the bill’s announcement in March, co-sponsor Rep. Rashida Tlaib said ‘corporate greed is a disease that has long afflicted this country—but the COVID-19 pandemic highlighted the gross income inequality and pay gap between CEOs and their employees in a way it never has been before.’
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