WASHINGTON -- April 12 -- Excessive CEO pay enriches corporate executives at the expense of working families' retirement savings, according to the new Executive Paywatch website, www.paywatch.org, unveiled by the AFL-CIO today. As part of a growing movement to reform executive pay, the website provides case studies on companies that rewarded CEOs with huge pay packages last year. It gives visitors tools to pressure companies to reform out of control CEO pay.www.paywatch.org
According to the New York Times, average CEO pay increased 12 percent in 2004 while the pay of average workers increased just 3.6 percent. Last year, the average CEO of a major corporation received $9.84 million in total compensation.
"We have seen a tremendous amount of interest among workers in holding CEOs and their boards accountable," said AFL-CIO Secretary-Treasurer Richard Trumka. "They are rightfully outraged when they learn about jaw-dropping executive compensation packages. It's time to put the brakes on runaway CEO pay."
This year, union-sponsored pension plans have submitted over 140 shareholder resolutions on CEO pay reform. The shareholder proposals include limiting golden parachutes, demanding pay clawbacks, expensing stock options and seeking shareholder approval of preferential executive pensions. These new shareholder proposals will accelerate the advances made last year, when an unprecedented 34 union fund-sponsored proposals on CEO pay won majority votes.
"The AFL-CIO looks out for the retirement savings of working families, which means we can't look away while CEOs run off with outrageous pay packages," said Trumka.
The paywatch website includes new case studies of excessive CEO pay for the following companies: Amgen (NASDAQ: AMGN), Coca-Cola (NYSE: KO), Dynegy (NYSE: DYN), Sprint (NYSE: FON), Sempra Energy (NYSE: SRE), and Wal-Mart Stores (NYSE: WMT). The case studies dissect the CEO pay packages and link to the union fund-sponsored shareholder proposal at each company.
At Wal-Mart, for example, President and CEO H. Lee Scott raked in nearly $23 million in total compensation in 2004. Most of that compensation was in the form of fixed price stock options and time-vesting restricted stock. At the company's annual meeting in June, shareholders will be asked to vote on a proposal urging the Board of Directors to grant Wal-Mart executives performance shares instead of stock options or restricted stock.
Coca-Cola, notorious for its generous executive severance packages, plans to give former CEO Douglas Daft an exit package reportedly worth $36 million when he left, the website reveals. The Executive Paywatch website also shines a spotlight on Sprint CEO Gary Forsee, who made over $19 million last year. He is expected to receive a $1.8 million annual pension benefit when he retires.
The new Executive Paywatch website gives readers the tools to execute a three-pronged strategy to contact regulators, the stock exchanges and the IRS. The campaign calls upon the SEC, the federal regulatory agency that protects investors' interests, to require better disclosure of CEO pay to investors. Visitors can also urge the stock exchanges to require genuine director independence, particularly on board of director compensation committees that are responsible for setting CEO pay. Finally, visitors can tell the IRS to enforce appropriate tax collection from America's executive elite, who can get away with abusive tax shelters, deferred compensation plans and underreporting of perks and capital gains.
"The average CEO made nearly $10 million last year while workers' wages were relatively stagnant," said Trumka. "We're calling on the SEC, the stock exchange and the IRS to join us in working towards responsible executive compensation levels."
The AFL-CIO represents more than 13 million working men and women. Union members participate in the capital markets as individual investors and through a variety of benefit plans. Union sponsored benefit plans have a total of more than $400 billion in assets.