Median CEO pay jumped 27 percent in 2010

While teachers, police officers, firefighters and public employees are being blamed for the Bush recession that has state and local governments struggling to balance their budgets, and public employees have made large concession of pay and benefits, there is some good news: median CEO pay jumped 27 percent in 2010.

According to a USA Today analysis of data from GovernanceMetrics International, they found that median CEO pay jumped to a mere $9 million a year, but workers in private industry, meanwhile, saw their compensation grow just 2.1 percent in the 12 months that ended in December 2010, according to the Bureau of Labor Statistics. I have not met any workers in the private or public sector who has gotten a raise in the last couple of years, and some Michigan state employees have taken a pay cut twice so far in the past three years, as well as taking unpaid furlough days to help balance the budget.

American workers are taking home less in real weekly wages than they took home in the 1970s.

The only people doing well in this economy are the superrich and now, apparently, CEOs. In fact, in 1965 the average CEO was earning 24 times what the average worker was making, but that has jumped to 263 times at a time when workers are making concessions in wages and benefits to make a company solvent.

The superrich have gotten spectacularly richer over the last four decades while their fellow citizens either treaded water or lost ground. The top 1 percent of American earners took in 23.5 percent of the nation’s pretax income in 2007 — up from less than 9 percent in 1976. From 2002 to 2007, that top 1 percent’s pretax income increased an extraordinary 10 percent every year. But the boom proved an exclusive affair: in that same period, the median income for non-elderly American households went down and the poverty rate rose.

In addition to a 27 percent pay increase, CEO bonuses are up a whopping 47 percent. It can and will be argued by right-wingers that they earned that large raise by increasing profits 47 percent, but, as USA Today points out, they boosted those profits by cost-cutting – AKA outsourcing - and layoffs. In fact, CEOs who slashed their payrolls the deepest and laid off the most workers took home 42 percent more compensation than the year’s chief executive pay average for S&P 500 companies, according to the 17th annual executive compensation survey by the Institute for Policy Studies (IPS).

But the gravy train does not end with a boost in pay and bonuses. CEOs saw the estimated future value of stock and options awards take off in 2010, with the median value gaining 32 percent to $5.6 million. These stock and options, many of which were granted when stock prices were much lower than they are now, stand to create a shower of wealth when CEOs cash them in.

Time to end the corporate welfare gravy train

With the Republicans in the U.S. Congress proposing cuts to successful and useful programs; like Planned Parenthood, Head Start, Pell Grants, NPR, nutrition grants for pregnant low-income women, the Environmental Protection Agency and many others, they continue to ignore that fact that corporations are not only reaping record profits, but many are not paying any income taxes and some are getting refunds.

U.S. Sen. Bernie Sanders, I-Vt., put out a list of the top 10 worst corporate income tax avoiders. As April 15 fast approaches and hardworking Americans fill out their income tax returns this tax season, General Electric and other giant profitable corporations are avoiding U.S. taxes altogether.

Sanders has called for closing corporate tax loopholes and eliminating tax breaks for oil and gas companies. He also introduced legislation to impose a 5.4 percent surtax on millionaires that would yield up to $50 billion a year. The senator has said that spending cuts must be paired with new revenue so the federal budget is not balanced solely on the backs of working families.

“We have a deficit problem. It has to be addressed, but it cannot be addressed on the backs of the sick, the elderly, the poor, young people, the most vulnerable in this country,” Sanders said in a press release. “The wealthiest people and the largest corporations in this country have got to contribute. We’ve got to talk about shared sacrifice.”

Here is the list:

1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.

2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.
3) Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.

4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.

5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year.

6) Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.

7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department.

8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury.

9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2007 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction.

10) Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.

Wisconsin Governor ready to call out National Guard to bust union

Republican politicians in both Michigan and across the nation are attacking the unions and the working class at an unprecedented rate; busting unions, rolling back hard-fought workplace protections and widening the gap between the rich and regular people.

It has gotten so bad that new Republican Gov. Scott Walker says the Wisconsin National Guard is prepared to respond wherever is necessary in the wake of his announcement that he wants to take away nearly all collective bargaining rights from state employees.

It appears that Republicans truly want to go back to the 1920s’ and ‘30’s when many workers gave their very lives for workplace dignity, safe working conditions and a decent wage; and we are even headed back to the Gilded Age.

In fact, we are headed back to 1928 when the gap between the wealthy and working class was so large it helped fuel the Great Depression. In 1928, one year before the global economic collapse, “the wealthiest .001 percent of the U.S. population owned 892 times more than 90 percent of the nation’s citizens. Today, the top .001 Percent of the U.S. population owns 976 times more than the entire bottom 90 percent.”

Already the gap between the super-rich and the disappearing middle class is huge, and bonehead and illegal moves by people like Walker will only make it worse. The fact is the U.S. is turning into a banana republic where there is a huge gap between the rich and the working class; something that is happening in the U.S. right now.
The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. That means the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.

No wonder Walker is acting like a Latin-American dictator.

In 1965 the average CEO was earning 24 times what the average worker was making. But by 2001 the C.E.O.’s of the largest American companies earned an average of 531 times as much as the average worker.

It makes no sense that to kill unions.

Republicans want only the middle class and the working poor to sacrifice

The “shared sacrifice” new Gov. Rick “Chief Executive Outsourcer” Snyder talks about and budget cuts national Republicans want will only come from the middle class and the working poor.

National Republicans will continue the polices that are making the U.S. a banana republic and ushering in a new “Gilded Age,” and Snyder wants to kill the Michigan Earned Income Tax Credit (EITC), the most effective anti-poverty tool ever invented.

The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. In 1965 the average CEO was earning 24 times what the average worker was making. But by 2001 the C.E.O.’s of the largest American companies earned an average of 531 times as much as the average worker.

Despite that huge gap that continues to grow, Republicans forced an extension of the Bush-era tax cuts for the richest 2 percent in exchange for a 13-month extension of unemployment insurance benefits for people just trying to survive. That move will add more than $36 billon to the federal budget deficit.

In Michigan, while giving his cabinet large raises, Snyder proposed killing Michigan’s Earned Income Tax Credit for working people.

The Michigan EITC is a refundable tax credit given to working families. People apply for it when they fill out their state income tax forms. All families who are eligible for the federal credit are eligible for the state credit. The tax credit puts money into the pockets of hundreds of thousands of Michigan working families. The EITC brought $338 million into local communities throughout Michigan last year. That’s money spent directly into the local community on goods and services, not invested in offshore ventures.

“The Michigan Earned Income Tax Credit is a successful anti-poverty tool that helps low- and moderate-income families and small businesses in Michigan,” said Gilda Z. Jacobs, the President and CEO of the Michigan League for Human Services. “Eliminating this credit amounts to a tax increase on our most vulnerable families and will tax working people into poverty.”

The Michigan EITC is based on the federal EITC created by Republicans President Gerald Ford and expanded by Republican Presidents Ronald Reagan and George HW Bush. In fact, patron saint Reagan called the EITC “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.”

In Michigan, the EITC went into effect for Tax Year 2008, and, ironically, the bill creating it was sponsored by one of the most rightwing lawmakers, former Sen. Nancy Cassis, R-Novi.

“As this debate continues, let’s remember the faces of those in our economy who are helped by this tool: janitors, housekeepers, restaurant workers, daycare and home health aides, cashiers and retail clerks,” Jacobs said. “These are the very people who often are in charge of our loved ones, or who make our days easier.”

What ‘shared sacrifice’ will Snyder make

We have heard very little details from new Gov. Rick “Chief Executive Outsourcer” Snyder, and that’s what we got from him in his inaugural speech where he said, “ It will require shared sacrifice from all of us.”

We’re still waiting for both details on how he plans to balance the state budget and "reinvent" Michigan, as well as what sacrifice he plans to share. The only details we have heard is that state employees, again, are going to have to make a sacrifice and it appears the budget will be balanced on their backs.
The fact is state employees earn less than their private-sector counterparts with comparable educational attainment, and state government is smaller now than it was in 1973.

My friend Judy over at Living Blue pointed out a Detroit Free Press article that Snyder appointed Michael Finney as president and CEO of the Michigan Economic Development Corporation. Finney will be paid $250,000 a year, and he will also will receive deferred compensation equal to 18 percent of his salary in lieu of a retirement plan. The person who held the job under former Gov. Jennifer Granholm and was only paid $200,000 a year.

So much for sacrifice.

Like all Republicans the only one Snyder wants to see make a sacrifice are the working and the middle class. The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. That means the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana. In 1965 the average CEO was earning 24 times what the average worker was making. But by 2001 the C.E.O.’s of the largest American companies earned an average of 531 times as much as the average worker.

We already know Snyder is the first Michigan governor to refuse to live in the Governor’s residence since the Lansing residence was donated to the state in 1969, and the Chicago Tribune, of all people, is reporting why. His stated reason is he has a daughter in a private high school in the Ann Arbor area and does not want her to move, but the Tribune pointed out that by refusing to move he gets the side benefit of keeping the indoor pool, wine cellar and movie theater that are part of his 10,600-square-foot home.

So much for sacrifice.

The Governor’s residence is no slum. It was renovated and expanded in 2003 and 2004 with $2.5 million in private funds. The 8,700-square-foot residence has five bedrooms, a private family room that includes a kitchenette, a fully commercial kitchen and an exercise room with two treadmills, a weight machine and a weight bench.

As for sacrifice, the Tribune is reporting that “during the early part of the renovation, Granholm lived in a small room above the garage. When her family of five moved in, they ate meals in the garage for months until the construction was done. Granholm recently moved into a rented condominium in the Lansing suburbs so her 13-year-old son, Jack, can finish 8th grade at his East Lansing middle school. “

There’s some sacrifice.

Snyder also promised to establish a blind trust for his personal assets during the campaign to avoid a conflict of interest, but he has not done that. So much for sacrifice.

“This is an important matter of personal integrity and ethics, especially for someone like Snyder who has promised to change ‘business as usual’ in Lansing,” said Michigan Democratic Party Chair Mark Brewer. “As a multi-millionaire, Snyder could make decisions as governor which benefit him financially.”

UPDATE: The Outsourcer did put his investments into a blind trust. According to the Detroit Free Press,”The Republican signed the paperwork amending his trust two days before he was sworn in as governor Jan. 1.” His spokesperson said she doesn't know how much money the he has in the trust, and a trustee will make all investment decisions now.

Columnist makes case for letting the Bush tax cuts for the super rich expire

It appears that the real winners in the Nov. 2 election are the super rich, but isn't that always the case?

New York Times columnist Frank Rich in his Nov. 13 column called “Who Will Stand Up to the Superrich?” really makes the case for letting the Bush tax cuts expire for the top 2 percent.

“The superrich who have gotten spectacularly richer over the last four decades while their fellow citizens either treaded water or lost ground. The top 1 percent of American earners took in 23.5 percent of the nation’s pretax income in 2007 — up from less than 9 percent in 1976. During the boom years of 2002 to 2007, that top 1 percent’s pretax income increased an extraordinary 10 percent every year. But the boom proved an exclusive affair: in that same period, the median income for non-elderly American households went down and the poverty rate rose.“

Rich said it will be the very top earners, “not your garden variety, entrepreneurial multimillionaires, who will be by far the biggest beneficiaries if there’s an extension of the expiring Bush-era tax cuts for income over $200,000 a year.”

It’s clear the tax cuts for the super rich will increase the budget deficit, but Rich thinks that’s not the biggest problem we face as the rich get richer. We have already seen where that means the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.

“The bigger issue is whether the country can afford the systemic damage being done by the ever-growing income inequality between the wealthiest Americans and everyone else, whether poor, middle class or even rich. That burden is inflicted not just on the debt but on the very idea of America — our Horatio Alger faith in social mobility over plutocracy, our belief that our brand of can-do capitalism brings about innovation and growth, and our fundamental sense of fairness. Incredibly, the top 1 percent of Americans now have tax rates a third lower than the same top percentile had in 1970.”

We Democrats have been accused of fostering class warfare and other ridiculous charges, but it’s simply not true.

“The most constant refrain is that small-business owners who file in this bracket would be hit so hard they could no longer hire new employees. But the Tax Policy Center found in 2008, when checking out similar campaign claims by “Joe the Plumber,” that only 2 percent of all Americans reporting small-business income, regardless of tax bracket, would see tax increases if Obama fulfilled his pledge to let the Bush tax cuts lapse for the top earners. The economist Dean Baker calculated that the yearly tax increase at the lower end of that bracket, for those with earnings between $200,000 and $500,000, would amount to $700 — which “isn’t enough to hire anyone.”

One of the favorite rightwing talking points is, “has a poor person ever given anyone a job.” True, but it appears the super rich are not either. Rich makes the factual argument that while the super rich had the benefit of the full Bush tax cuts, we lost millions of jobs every month, so why would extending them to the top 2 percent change that?

“American companies seem intent on sitting on trillions in cash until the economy reboots. Meanwhile, the nonpartisan Congressional Budget Office ranks the extension of any Bush tax cuts, let alone those to the wealthiest Americans, as the least effective of 11 possible policy options for increasing employment.”

The growing inequality gap is turning the U.S. into a banana republic

Nicholas D. Kristof, a two-time winner of the Pulitzer Prize and a New York Times columnist, is seeing alarming similarities between the banana republics he has spent his stellar career covering and the U.S. because of our growing inequality.

Kristof is widely known for bringing to light human rights abuses in Asia and Africa, such as human trafficking and the Darfur conflict. He has lived on four continents, reported on six, and traveled to 150 countries and all 50 states. However, he said what marks banana republics is the huge gap between the rich and the working class; something that is happening in the U.S.

He said “in some of these plutocracies, the richest 1 percent of the population gobbles up 20 percent of the national pie,” something that is happening in the U.S., but he also said the disastrous mid-term elections could make the situation even worse.

Kristof said “The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976.” That means the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.”

I have highlighted the growing gap the average worker and the CEO in past posts, and the fact that CEOs rake in even more millions of dollars if they kill American jobs. But the problem is even worse than I thought.

In 1965 the average CEO was earning 24 times what the average worker was making. But by 2001 the C.E.O.’s of the largest American companies earned an average of 531 times as much as the average worker.

The middle class is disappearing as fast as union membership, which created, the middle class, yet there are people voting to quicken the demise of the middle class by supporting Bush’s tax cuts for the most affluent 1 percent. They sure need all the breaks they can get.

Kristof makes the argument that instead of given more unneeded break to the richest 2 percent, that at a time of “9.6 percent unemployment, wouldn’t it make more sense to finance a jobs program? For example, the money could be used to avoid laying off teachers and undermining American schools.” He also said that an “obvious priority in the worst economic downturn in 70 years should be to extend unemployment insurance benefits, some of which will be curtailed soon unless Congress renews them. Or there’s the Trade Adjustment Assistance program, which helps train and support workers who have lost their jobs because of foreign trade. It will no longer apply to service workers after Jan. 1, unless Congress intervenes.”

The growing inequality gap between the working class and the rich can and has suppressed growth.

The column cites the research of Robert H. Frank of Cornell University, Adam Seth Levine of Vanderbilt University, and Oege Dijk of the European University Institute that found that inequality leads to more financial distress. Kristof said that they looked at census data for the 50 states and the 100 most populous counties in America, and found that places where inequality increased the most also endured the greatest surges in bankruptcies.


“Another consequence the scholars found: Rising inequality also led to more divorces, presumably a byproduct of the strains of financial distress,” Kristof said. “Maybe I’m overly sentimental or romantic, but that pierces me. It’s a reminder that inequality isn’t just an economic issue but also a question of human dignity and happiness.”

The Chief Outsourcer continues to chicken out on debates

Somebody is going to have to follow Rick “Chief Executive Outsourcer” Snyder around to his staged townhall meetings with friendly audiences in a chicken suit shame him into a debate with Democratic Gubernatorial Nominee Virg Bernero.

It has been more than a month since Bernero issued a challenge to debate, and Synder has come up with excuse after excuse to not do it. Snyder has a history of being afraid to debate. He even ducked the debates with the Republican nominees. The last and only debate he took part in was a debate sponsored by the Michigan GOP on April 21 at Michigan State University broadcast by Lansing TV station WLNS. He did so badly in the debate that he went back to his staged townhall meetings.

He did a friendly interview yesterday on classic rock station WHMI in Howell with the “morning crew,” and his new excuse for ducking the debates is that Bernero wants too many debates. Bernero formally issued a challenge last month to hold eight debates before the November 2 election, but the Lansing Mayor has accepted three. But Snyder lied to the hosts and said eight is too many.

Fine, then do the three that Bernero has already agreed to. The simple truth is the only way Snyder will debate is if the media and the public pressure him to do so.

Snyder has paid millions to cultivate this image as a successful businessman and job creator, and this is simply not true. Snyder spent $7.6 million on 30-second TV spots to win his party's gubernatorial primary, $6.1 million of which came from his own deep pockets. A real debate in front of a neutral audience will tarnish that expensive, bought and paid for image and revel him to be the empty suit he really is.

He also claims to be a job creator, but that is a lie, unless you count jobs created in China. He shipped 20,000 American jobs to China and other parts of Asia when he was head of Gateway. A report earlier this month by the Institute for Policy Studies (IPS) shows that the more CEOs cut jobs, the more money they made, and Snyder earned millions doing so. He cashed in on 355,000 stock options worth $23.7 million at a time that executives at the company admitted they misrepresented the company’s financial outlook. He took that money to buy the governorship of Michigan.

Republicans seem to be taking the example of the chief outsourcer at the top of the ticket and ducking debates.

Democratic Secretary of State nominee and Wayne State University law Professor Jocelyn Benson challenged her opponent to three debates last month, and, like the empty suit at the top of the ticket, the Republican has been silent. That’s a little strange, considering the Republican is a “career politician” teabggers claim they hate, and Benson has never ran for elective office before.

The only people who have agreed to debate are the Attorney General candidates. Democratic nominee and Genesee County Prosecutor David Leyton will take part in a debate moderated by Off the Record host Tim Skubick that will air on Sept. 24. The taping will take place this weekend at the studios of PBS station WKAR TV in East Lansing.

Chief Outsourcer Snyder and other CEOs make millions for cutting and outsourcing jobs

We already know about the millions of dollars in compensation CEOs rake in while workers take cuts in pay and benefits to help the company, but the CEOs who slashed their payrolls the deepest took home 42 percent more compensation than the year’s chief executive pay average for S&P 500 companies, according to the 17th annual executive compensation survey by the Institute for Policy Studies (IPS).

Despite headlines in newspapers that poor CEO’s are seeing cuts in pay the last two years, executive pay overall remains far above inflation adjusted levels of years past. In fact, after adjusting for inflation, CEO pay in 2009 more than doubled the CEO pay average for the decade of the 1990s, more than quadrupled the CEO pay average for the 1980s, and ran approximately eight times the CEO average for all the decades of the mid-20th century.

In fact, in 1965 the average CEO was earning 24 times what the average worker was making, but that has jumped to 263 times at a time when workers are making concession in wages and benefits to make a company solvent. CEOs are sacrificing nothing.

According to the IPS, American workers, by contrast, are taking home less in real weekly wages than they took home in the 1970s. But we don’t need a report to know that.

For their sacrifice, workers are shown the door, and, unfortunately, layoffs and offshoring jobs to Third World countries is how CEOs feather their already opulent nests and the only place they ever look to cut costs.

That’s how Republican Gubernatorial nominee and Chief Executive Outsourcer (CEO) Rick Snyder make a cool $23.7 million when he left Gateway Computers after he shipped 20,000 American jobs to China and other parts of Asia.

But Snyder isn’t spending those millions of yachts, cars or airplanes; he is spending his on buying the governorship of Michigan, just like the former GOP Gubernatorial nominee the Amway Guy Dick DeVos tried to do in 2006 and failed.

The post-primary campaign finance reports were filed on Thursday, and they showed Snyder spent $7.6 million to win his party's gubernatorial primary, $6.1 million of which came from his own deep pockets, earned for cutting jobs; chump change. He spent more money that the other four GOP candidates combined.

Vote for Virg Bernero in November; a man who has actually created jobs here in Michigan

Insurance CEO gets 51 percent raise, policy holders get 39 percent rate increase

The rich continue to get richer.

Health insurance giant WellPoint Inc. gave CEO Angela F. Braly a 51 percent raise last year, even as the health insurance giant prepared a massive 39 percent rate increases in California, according to the LA Times. Braly saw her total compensation shoot to $13.1 million, from $8.7 million a year earlier, according to a filing with the Securities and Exchange Commission. Even though CEO pay is well above that of other executives, at least three other WellPoint executives got compensation increases of as much as 75 percent.

It seems kind of funny that the Michigan Legislature is trying to take away a 3 percent negotiated raise from state employees who have made concessions that have saved the state more than $3.7 billion since 2001, but a health insurance executive is getting a 75 percent raise.

In 1965 the average CEO was earning 24 times what the average worker was making. But in 2005, the average CEO was making 262 times what the average worker is making. Thirty to forty years ago, the CEOs of major companies earned 80 percent more, on average, than the third-highest paid executive. By 2001 that gap had ballooned to 260 percent, according to a study by Carola Frydman of the Massachusetts Institute of Technology and Raven E. Saks at the Federal Reserve.

Policy holders in California are going to see a 39 percent increase in premiums in order to pay for security-related improvements to Ms. Braly’s home and car, and personal security when she travels.

Now we know why all those spaghetti dinner fundraisers are needed to help people with health care insurance pay their medical bills.

WellPoint is the “nation's leading health benefits company serving the needs of more than 33 million medical members nationwide.”