WASHINGTON ― The average chief executive of a big U.S. company earns hundreds of times what the average American worker makes, according to an analysis released Tuesday by the AFL-CIO.
The labor federation analyzed CEO compensation at 419 companies in the Standard & Poor’s 500 index. It found that the executives’ pay had jumped nearly 6 percent over the previous year, far outpacing the raises of a typical worker.
The average haul of an executive in 2016 was $13.1 million, including stock options. Meanwhile, the average rank-and-file worker earned a salary of just $37,632, according to data from the Bureau of Labor Statistics. That translates to a pay ratio of 347 to 1.
“It’s shameful that CEOs can make tens of millions of dollars and still destroy the livelihoods of the hard-working people who make their companies profitable,” Richard Trumka, president of the AFL-CIO, said in a statement.
On Tuesday, the union highlighted food manufacturer Mondelez International, which makes Nabisco products like Oreos and Ritz Crackers. The company announced last year that it would lay off hundreds of workers in Chicago and shift production to Mexico, where labor costs are much lower.
The AFL-CIO launched a boycott of Mexican-made Oreos; Donald Trump said during the presidential campaign that he would boycott the cookies as well. The company shrugged off the criticism. According to Tuesday’s report, Mondelez CEO Irene Rosenfeld made over $16.7 million last year.
“Greedy CEOs are continuing to get rich off the backs of working people,” former Nabisco worker Michael Smith said in a statement. “I loved working at Nabisco, and I took pride in the work I did to make a quality product. It’s not as if the company isn’t profitable.”
A spokeswoman for Mondelez told HuffPost that its CEO’s pay had actually decreased by $3 million from 2015.
“We continually review compensation and benefits to ensure we remain competitive while also seeking to improve efficiency and productivity for the long-term viability of our company and the jobs we create,” the spokeswoman said.
The CEO pay data in Tuesday’s report comes from Securities and Exchange Commission filings in which publicly traded companies are required to disclose executive compensation. The worker pay numbers come from aggregate data published by the U.S. Labor Department, rather than worker pay at particular companies, meaning the 347 to 1 ratio doesn’t perfectly describe every company the AFL-CIO analyzed. In reality, some companies’ ratios would be worse than others.
A lot of investors and employees would love to know how a particular CEO’s pay compares to the salaries of his or her employees, rather than to those of the U.S. labor force at large. Under the Dodd-Frank Wall Street reform law, companies would have to disclose that very information starting this year. But business lobbies have pushed hard against what’s known as the CEO pay ratio rule, probably because it would embarrass a lot of executives.
Earlier this year, the then-interim chair of the Securities and Exchange Commission took steps to delay the rule further. It isn’t clear what the SEC’s newly confirmed chairman, Jay Clayton, plans to do with the rule, though he is a former Wall Street bailout lawyer who worked for Goldman Sachs.
Supporters of the rule say investors deserve to know if a company has a wildly imbalanced ratio of CEO-to-worker pay.
“We think it’s incredibly important information for investors,” the AFL-CIO’s Heather Slavkin said on a conference call with reporters. “We’ll be fighting to preserve it.”