Monday, Jun 27, 2016
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Editorial

Exorbitant CEO pay

The Occupy protesters got it right: When corporate CEOs make 380 times the salary of the average American worker, you don't have to be a Marxist to feel something is out of whack.

Last year, the average annual CEO pay of companies in the Standard & Poor's 500 index jumped 13.9 percent, to $12.94 million. Average worker pay rose 2.8 percent, to $34,053. This gap is the largest in the world, the AFL-CIO says.

It wasn't always this way. Three decades ago, U.S. corporate CEOs were paid 42 times the annual salary of the average worker -- a hefty difference, but puny by today's standards. In 2010, the average CEO pay was 343 times as much.

An average worker would have to toil for 11,100 years to make as much as Apple CEO Timothy Cook. With an annual executive pay package of $378 million, Mr. Cook makes in two hours and 12 minutes what the President of the United States is paid in a year.

Some shareholders are growing restless over exorbitant CEO pay. This month, Citigroup shareholders rebelled against chief executive Vikram Pandit's $15 million pay package. Two days later, one of them filed suit to block the plan.

Workers wouldn't mind high CEO pay so much if they saw their own lot improving. But too often, employees must bear more of their health insurance costs. Company pension plans are disappearing, while pay is stagnant or declining.

Income inequality is spawning division in America. It starts at the top.

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