There is a new study on executive compensation sponsored by United for a Fair Economy and the Institute for Policy Studies, Executive Excess 2008: How Average Taxpayers Subsidize Runaway Pay.
The report notes that for 2007, the S&P 500 CEOs averaged $10.5 million in take-home pay--344 times the pay of the ordinary US worker. Hedge fund managers at the top 50 hedge funds, who benefit from a number of loopholes that have grown up around partnerships and interpretation of profits interests, averaged an astounding $588 million--19,000 times the pay of the average US worker.
The report looks at a number of tax subsidies for executive pay built into the tax code (or into the interpretations currently in vogue). Several of them apply to most hedge fund managers, including the treatment of services fees that are received in the form of a "carried interest" in the profits of the service partner's partnership as capital gains rather than ordinary services income, the ability to defer compensation and to move compensation offshore. Stock options and the general deductibility of "performance-based" compensation, no matter how egregiously high compared to workers' wages, are other subsidies highlighted.
The report also focuses on one of the factors that has permitted executive compensation to grow so rapidly over the last thirty years, from about 30-40 times the average workers' pay to more than 340 times the average workers' pay. That is the decline in unionized workers, brought about in large part by a number of anti-union laws that were passed that permit employers to make employees fear that unions will cost them their jobs. (Witness the recent Walmart propaganda covered in the New York Times and other news sources, such as the Huffington Post, regarding WalMart's required meetings for employees about the Employee Free Choice Act, which were essentially meetings to tell employees to vote Republican because Democrats would support unionization which would mean that many of their jobs would be cut because WalMart would have to pay higher wages.)
Here's what the report found on this issue of unions and executive compensation.
"In one survey, released last year, researchers found that CEOs at nonunion companies take home nearly 20 percent more than their fellow executives in unionized firms. Workers in union companies, meanwhile, make $200 more a week than their counterparts in nonunion firms, $863 a week for union employees, only $663 weekly for their nonunion counterparts."
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