I Thought We Were All In This Together

By Hamilton Nolan  |  March 12, 2018 | 4:12pm
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Starting this year, America’s public companies are required to tell you how much the CEO earns as compared to the median worker. The distress surrounding this disclosure of basic facts is odd. After all, we’re all valuable team members in this company, right?

The fact that CEO pay in America is a scandal and a scam and a ripoff for shareholders and a slap in the face for workers is not new. Indeed, that is why, in the wake of the financial crisis, Congress decided to mandate this CEO-to-worker pay ratio disclosure, which is finally taking effect after years of extremely absurd whining from the corporate community. The spectacle of the world’s biggest and most sophisticated corporations arguing that uh, calculating a pay ratio would be too much of a burden on them—although they are perfectly able to build microprocessors and oil refineries and software—would be funny if it weren’t so pathetic. American CEOs are paid far more than their counterparts in other advanced nations, and they are often showered with huge pay increases simply for being in the right chair when the stock market was going up. Nobody, particularly not CEOs, actually believes that a CEO’s job is 140 times harder than the job of the mid-level worker. If an institution is scared to tell its own employees how much more the boss is making, that may be indicative of an underlying problem!

Corporate America faces a basic rhetorical quandary. On the one hand, it wants its employees to believe that they are the company’s greatest asset—valuable team members, a top priority, who should be proud of the company’s success, which is a credit to their hard work. On the other hand, corporate executives want to pay their employees the absolute minimum amount possible, while paying themselves the absolute maximum amount possible. These minimum and maximum amounts are dictated in part by the competitive demands of the marketplace (which, contrary to “free market” principles, corporations work assiduously to minimize), but also by the limits of public relations. The CEO and the investors he works for want to keep labor costs as low as possible without causing either a public scandal or an internal labor revolt. Disclosing the hilariously corrupt gap between the pay of the average worker and the boss complicates that demand. Hence the frantic hiring of PR firms and compensation consultants and tax attorneys to try to massage the figure to the extent possible.

You do not need a degree in business or accounting to know that it is unfair for the CEO of your company to make in one year what it would take you three or four hundred years to make. And you do not need to be a financial consultant to know that, if the executives of your company are being paid extra because the company became more valuable, so should you. The company owes its great performance to you, the workers, right? That’s what they say in all their internal emails. But how much profit sharing are you getting? What percentage of stock price growth is accruing to you, the average workers, as bonuses or pay increases? Why not raise everyone’s salary in response to a rise in firm value, rather than just the one asshole at the top—who any honest expert can tell you is at least as lucky as he is talented?

This should be the basic proposition of a fair company: The employees will share as equal partners in the good fortunes of the firm. That does not mean that everyone is paid the exact same amount of money. It means that we admit that a company’s increasing value is the result of the work of all the people who work there, and we ensure that their compensation reflects the fruits of their labor. We should not see large increases in CEO pay without seeing large increases in average overall pay. We should never see insane, triple-digit CEO-to-worker pay ratios. It goes against the basic proposition that we are all in this together. And that’s what you tell us, right boss?

We don’t want to see the CEO learning heartwarming life lessons on “Undercover Boss.” What we want is our share of the fucking money. Either we’re valuable team members who are the company’s greatest asset, or we should go fuck ourselves because the CEO is out for himself. Companies should pick one, and say it proudly. Then stop whining.

 
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