The millionaire CEOs of some of the American companies with the lowest-paid workers saw an average pay raise of 29% in 2020 while their workers saw a 2% decrease, according to a report released Tuesday.
The Institute for Policy Studies calculated that the average CEO compensation in 2020 was $15.3m when looking at the 100 companies with the lowest median wage for workers in the S&P 500 index.
The median worker pay was $28,187. This means that CEOs saw a 29% pay raise compared to 2019, while workers saw a 2% decrease. For all 100 companies, median worker pay was below $50,000 for 2020.
The compensation hike came as companies gave their top leaders hefty bonuses and forgiving performance benchmarks during the pandemic, allowing the top executives to cash in while their low-wage employees were essential workers.
Hilton’s CEO, Christopher Nassetta, had a compensation package worth $55.9m in 2020, the highest of the CEOs analyzed in the report, while median pay at the company was $28,608, down from $43,695 in 2019. Since the pandemic affected the company’s expected performance, and thus Nassetta’s expected compensation, the company’s board restructured its stock awards to give its CEO ample pay in 2020, according to the report.
Other CEOs were met with friendly treatment from their respective corporate boards. Chipotle’s board removed the company’s poor financial results from the peak of the shutdown and excluded Covid-related costs when calculating CEO Brian Niccol’s compensation. Niccol received $38m last year, which is 2,898 times more than the company’s median worker pay of $13,127.
David Gibbs, the CEO of Yum Brands, parent company to KFC, Pizza Hut and Taco Bell, ended up with a $1.4m cash bonus and stock grant valued at more than $880,000 after the company changed his performance metrics. The bonus was over twice the $900,000 of his salary Gibbs announced he would forgo to fund one-time $1,000 bonuses to the general managers of his company’s restaurants last March. Gibbs’ 2020 compensation was $14.6m while the company’s median pay was $11,377, according to the report.
The authors of the report urge support for a bill introduced in March by Senator Bernie Sanders called the Tax Excessive CEO Pay Act, which would incentivize companies to narrow the pay gap between workers and top executives by imposing a tax rate on companies with high gaps. Publicly traded companies are required to report the ratio between their CEO and median worker pay to the Securities and Exchange Commission as part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.
“During the pandemic, millions of people are struggling to put food on the table, [and a] handful of billionaires are becoming richer,” Sanders said in March when introducing the bill. “Is that the America that we want? I don’t think so.”
Such a tax rate already exists in Portland, Oregon, where the city has a 10% tax surcharge on companies that pay their CEOs 100 to 250 times more than their median workers and a 25% surcharge to companies whose ratio is over 250. In 2019, the tax raised $2.4m from 153 companies who acknowledged the tax liability. Voters in San Francisco last year approved a ballot measure of a similar tax based on pay ratio, to start in 2022. The city expects the tax to generate up to $140m in revenue.
This content first appear on the guardian