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"Exorbitant CEO pay has contributed to rising inequality in recent decades—concentrating earnings at the top and leaving fewer gains for ordinary workers," said one expert at the Economic Policy Institute.
Chief executive officers at the largest companies in the United States saw their compensation surge by 1,085% from 1978 to 2023, compared with only a 24% increase for typical worker pay, according to an annual report published Thursday.
The Economic Policy Insitute (EPI) analysis focuses on the 350 largest publicly owned U.S. firms by revenue.
"Since CEO pay is mostly stock-based—and the value of stocks changes frequently—calculating it is not entirely straightforward," the report explains, so EPI uses "a backward-looking measure—realized compensation—and a forward-looking measure—granted compensation."
CEOs' annual realized compensation in 1978 was $1,874,000 in 1978, but rose to $22,207,000 last year—the 1,085% increase. Meanwhile, private-sector workers were making $57,000 a year nearly half a century ago, and have only seen that rise to $71,000.
"The realized CEO-to-worker compensation ratio was 290-to-1 in 2023, in stark contrast to the 21-to-1 ratio in 1965," the report says. "Over the last two decades, the ratio has been far higher than at any point from the 1960s to the early 1990s."
The report notes some limited progress. Last year's analysis—released amid the United Auto Workers strike at the "Big Three"—found that CEOs made 344 times as much as typical workers. There was a 19% decrease in CEOs' realized compensation from 2022 to 2023. The report also points out positive trends regarding how they are compensated.
"The composition of CEO compensation is shifting away from the use of stock options and toward stock awards—a promising move to align CEO pay to longer-term incentives," the report details. "In 2006, stock options accounted for just over 70% of stock-related pay in realized CEO compensation. But in 2023, stock options made up only 22%, with vested stock awards accounting for the rest. Stock-related pay (exercised stock options and vested stock awards) averaged $16.7 million in 2023 and accounted for 77.6% of average realized CEO compensation."
However, economic justice advocates argue that far more must be done to improve U.S. worker pay and job conditions.
The report highlights "how distorted CEO pay is, even compared with the most privileged workers in the U.S. economy."
EPI researchers found that "CEOs made over 9 times as much in salary as even the most privileged 0.1% of workers in the economy. This 9.4 ratio in 2022 was 6.8 points higher than the historical average of 2.6 over the 1965–1978 period."
"This is a large change, meaning that the relative pay of CEOs increased by an amount equal to the total annual wages of nearly seven of these very high-wage earners," the report states.
As EPI chief economist and report co-author Josh Bivens emphasized, "CEOs are paid so much more because of their extraordinary leverage over corporate boards, not because of an extraordinary skill or contribution they make to their firms."
"Exorbitant CEO pay has contributed to rising inequality in recent decades—concentrating earnings at the top and leaving fewer gains for ordinary workers," he said. "The silver lining in this otherwise unfortunate trend is that CEO pay can be curtailed without damaging economywide growth."
EPI's policy recommendations include implementing higher marginal income tax rates at the very top and hiking corporate tax rates for firms that have higher ratios of CEO-to-worker compensation.
Americans for Tax Fairness and the Institute for Policy Studies earlier this year identified 35 major U.S. corporations—including Ford, Netflix, and Tesla—that paid their top executives more than they paid in federal taxes between 2018 and 2022.
The new EPI report stresses that "ideally, tax reforms would be paired with changes in corporate governance."
EPI senior economist and report co-author Elise Gould said that "policies that limit CEOs' ability to collude with corporate boards to extract excessive compensation are needed to prevent the U.S. from becoming a winner-take-all society."
"Even though he may be able to afford some of the most expensive lawyers in America—no, Dr. de la Torre is not above the law," said Sen. Bernie Sanders.
A U.S. Senate panel led by Sen. Bernie Sanders voted Thursday in favor of holding Steward Health Care CEO Ralph de la Torre in civil and criminal contempt after he refused to appear at a hearing last week in defiance of a congressional subpoena.
The Senate Health, Education, Labor, and Pensions (HELP) Committee passed the contempt resolutions in a near-unanimous vote, with Sen. Rand Paul (R-Ky.) abstaining.
The vote marked "the first time in modern American history that the HELP Committee has issued a civil or criminal contempt resolution," according to Sanders' office.
The approval of the two resolutions, which now head to the full Senate for consideration, could mean jail time for de la Torre, who has come under fire for purchasing two yachts as his private equity-backed company faced financial turmoil. De la Torre was paid a salary of nearly $4 million the year before Steward ultimately filed for bankruptcy.
A lawyer for de la Torre insisted in a letter to Sanders (I-Vt.) on Wednesday that the CEO "lacks the authority to speak on behalf of Steward with respect to the ongoing bankruptcy proceedings and he is prohibited by a federal court order from doing so."
Ahead of Thursday's vote, Sanders said de la Torre's decision not to comply with the Senate HELP Committee's subpoena was "unfortunate and unacceptable."
"For months, this committee has invited Dr. de la Torre to testify about the financial mismanagement and what occurred at Steward Health Care. Time after time he has arrogantly refused to appear," said Sanders. "Dr. de la Torre has given us no choice but to move forward this morning on two resolutions to enforce the subpoena and to hold him accountable for his actions."
"Even though Dr. de la Torre may be worth hundreds of millions of dollars, even though he may be able to own fancy yachts and private jets and luxurious accommodations throughout the world, even though he may be able to afford some of the most expensive lawyers in America—no, Dr. de la Torre is not above the law," Sanders added.
Sen. Ed Markey (D-Mass.), a member of the Senate panel, said in a statement that "as a physician and as the CEO of Steward from its founding, there is no one who understood the potential consequences of Steward's failures more than Dr. Ralph de la Torre."
"Dr. de la Torre led Steward when it sold out hospital real estate to Medical Properties Trust and allowed [the private equity firm] Cerberus to extract over $800 million in profit," said Markey. "Dr. de la Torre led Steward as eight hospitals closed, 2,000 patients were endangered, and at least 15 patients died. Dr. de la Torre led Steward as it filed for bankruptcy."
"We are making clear to Dr. de la Torre, the Steward Board of Directors and senior leadership, and other CEOs, private equity investors, and corporate executives who treat the healthcare system like their piggy bank: Your millions do not shield you from accountability to a legal order issued by the United States Senate," Markey added.
The Senate panel's passage of the two resolutions comes a week after Steward nurses told the committee—in de la Torre's absence—that Steward-owned hospitals were disastrous for patients and healthcare workers. A report published by the Senate HELP Committee earlier this month found that "death rates for certain conditions at some Steward-owned hospitals increased as death rates for those same conditions held steady or decreased across the country."
Lisa Gilbert, co-president of the consumer advocacy group Public Citizen, said in a statement Thursday that the Senate panel's "actions today are an important reminder that no one is above the law."
"Congress and the American people deserve answers on what happened under Dr. de la Torre's watch at Steward, as his damaging actions had real consequences for patient health," said Gilbert. "Dr. de la Torre and others like him should not be able to ignore congressional subpoenas without accountability."
If the full Senate approves the criminal contempt resolution, it would "refer the matter to the U.S. Attorney for the District of Columbia to criminally prosecute Dr. de la Torre for failing to comply with the subpoena," Sanders' office said.
"These attacks violate the human right to life, absent any indication that the victims posed an imminent lethal threat to anyone else at the time."
Experts from the United Nations and human rights groups said that the device attacks in Lebanon, which killed at least 37 people Tuesday and Wednesday while injuring 2,900, violated international law due to their indiscriminate nature and could constitute a war crime.
The surprise attacks have been widely attributed to Israel, including by unnamed U.S. officials. They came in two waves. On Tuesday afternoon local time, thousands of pagers exploded, killing 12 people, including four children, and injuring 2,300. On Wednesday, another 25 people were killed and 600 injured by the explosion of other communications devices, including walkie-talkies and smartphones. Many of the explosions occurred in supermarkets and other public spaces around Lebanon, leaving civilians maimed.
"These attacks violate the human right to life, absent any indication that the victims posed an imminent lethal threat to anyone else at the time," a group of more than a dozen U.N. legal experts said in a statement on Thursday, including Ben Saul, the U.N.'s special rapporteur on human rights and counter-terrorism.
The U.N. experts called the attacks "a terrifying violation of international law."
Volker Türk, the U.N. High Commissioner for Human Rights, also denounced the attacks in a statement on Wednesday, calling them "shocking, and their impact on civilians unacceptable," and saying that "the fear and terror unleashed" was "profound."
"Simultaneous targeting of thousands of individuals, whether civilians or members of armed groups, without knowledge as to who was in possession of the targeted devices, their location, and their surroundings at the time of the attack, violates international human rights law and, to the extent applicable, international humanitarian law," Türk added.
Widespread pager explosions across #Lebanon & in #Syria yesterday are shocking and their impact on civilians unacceptable.
@volker_turk urges against further widening of current conflicts & calls for those responsible for such an attack to be held to account.
— UN Human Rights (@UNHumanRights) September 18, 2024
Israel hasn't confirmed or denied responsibility for the device attacks but has indicated that it's shifting its military focus to the north as tensions mount with Hezbollah, an Iran-backed militant group and political party in Lebanon.
Israel and Hezbollah have traded airstrikes and rocket fire for the last 11 months, leaving many hundreds dead, mostly on the Lebanese side, but until now both sides have avoided an escalation that led to full-scale war. Hezbollah leader Hassan Nasrallah said Thursday that the attacks were a "declaration of war" and Israel had crossed "all red lines."
Al Jazeera reported Wednesday that "Israel's supporters have celebrated the explosions in Lebanon, describing them as 'precise,' but the blasts went off around civilians—at funerals and in residential buildings, grocery stores, and barber shops, among other places."
The attacks' victims included a 9-year-old girl who had just that day finished her first day of fourth grade, as well as an 11-year-old boy and at least two other children. Some of the Wednesday explosions took place at funerals for those killed in the first wave. The explosions have led to panic regarding devices in the country.
Sarah Leah Whitson, executive director of the rights group Democracy for the Arab World Now (DAWN), told Al Jazeera "this is exactly why booby-traps of ordinary civilian objects are illegal—because not only do they cause physical harm and injury, they cause psychological and emotional harm."
Whitson, who previously worked at Human Rights Watch, called the attacks "inherently indiscriminate"—violating international humanitarian law designed to protect civilians—and a "deliberate decision on the part of Israel" to create chaos.
Huwaida Arraf, a U.S.-based human rights lawyer, agreed with Whitson, telling Al Jazeera that the coordinated attack "meets the textbook definition of state terrorism."
The experts cited a 1996 U.N. treaty that forbids the use of "booby-traps" on devices associated with civilian use.
Experts said that even if Israel sought to kill Hezbollah military operatives—the devices that exploded had been ordered by Hezbollah—there was no way it could have precisely targeted them with such attacks. Many Lebanese work for Hezbollah in non-combatant roles.
Luigi Daniele, an expert in international humanitarian law at Nottingham Trent University, told Anadolu Agency that targeting non-combatants is a violation of international humanitarian law, as written in Article 8(2)(b)(i) of the Rome Statute. Like other experts, Daniele also cited the more general issue of detonating explosives in public places, which carries foreseeable impact on civilians that can violate Article 8(2)(b)(iv) of the statute.
Saul, the U.N. rapporteur, said that being a Hezbollah accountant shouldn't make someone a target for assassination.
"The crux of the problem is it is absolutely impossible to know who would be in possession of so many pagers at the time they were detonated," he said, adding that the devices could have been passed on to loved ones.
Lama Fakih, the Middle East director at Human Rights Watch, agreed that the attacks were "unlawfully indiscriminate" and called for an independent investigation, in a statement issued Wednesday.
U.S. Rep. Alexandria Ocasio-Cortez (D-N.Y.) herself called for a congressional investigation, including into whether U.S. played a role in the attack. Members of the Biden administration have so far said relatively little publicly about the attacks.
The Lemkin Institute for Genocide Prevention issued a sharply-worded condemnation of the attacks on Thursday.
"What we see is a genocidal state that is completely out of control and supported by a Western world that is, in large measure, too racist and Islamophobic to care," the nonprofit group wrote on social media.
The Tuesday pager attacks also extended into Syria, where 14 people were injured.