It's time for Congress to move on CEO pay reform

The Teamsters have taken a stand against excessive pay at McKesson.

While Americans may differ on the remedies and solutions, most agree that income inequality is a very real problem with devastating effects for families and communities across the nation. And the Teamsters have been active in challenging lawmakers and companies to change it.

CEOs are paid more than 300 times the average worker. In good times or bad, CEOs are coming out on top. When companies struggle, workers bear the brunt – not so for all too many bosses who chase short-term unsustainable goals, inspired by exorbitant sums of cash, equity and perks. The direct effects are clear – lack of investment going back into companies for employees, research and development, destruction of morale and motivation for front-line workers and a dangerous always escalating expectation of compensation at the top. Long-term shareholders such as pension funds suffer as companies can't sustain growth, creating more risk and uncertainty for working families.

The Teamsters are taking corporations to task on these issues. In fact, the union is currently sponsoring a shareholder proposal at McKesson that would address the automatic accelerated vesting of equity awards for top executives in the event of a change of control. At the center of the controversy is the company's CEO John Hammergren, formerly listed as as the nation's highest paid chief executive.

Hammergren's compensation is especially egregious given that many employees earn wages so low they can't contribute in the company's health or retirement plans. As Teamsters General Secretary-Treasurer Ken Hall said:

McKesson should ensure that front-line employees can afford health care and a secure retirement before lavishing hundreds of millions in unearned compensation to a handful of highly paid executives. Guaranteeing windfall payouts to top executives on their way out the door does not benefit shareholders over the long term.

The Dodd-Frank Act of 2010 recognized this problem and created a mandate for publicly traded companies to disclose the ratio of CEO pay to the median company employee’s pay. Such disclosure could provide shareholders crucial insight on risks related to their investment. The Securities and Exchange Commission (SEC) to date has not implemented a rule despite receiving wide-scale public feedback on their proposed rule.

It is now five years since the passing of Dodd-Frank. Despite various pronounced timelines from the SEC that always end up being pushed back, the U.S. still has no rule, no disclosure and no end in sight for the growing pay disparity at American companies. This rule and others regarding executive compensation remain the glaring loose end from the financial reforms that came about to address the issues which lead to Great Recession.

While this disclosure alone cannot resolve income inequality in our country, it can help identify a huge source of the problem and inform how we want to shape compensation in corporate America. We as a nation cannot afford to wait any longer and the SEC must play its part.

Today's Teamster News 05.29.14

Trade
The fight to save an industry and middle class jobs from imports  Cleveland Plain Dealer   ...The United States is losing middle class jobs; but those in the fight to limit steel imports are hoping they will be able to offer an example on how to save them. At its core, the effort to limit steel imports is part of a much bigger effort to save American jobs. Not just any job, but “decent-paying” and “family supporting” jobs, to draw upon the chants of organized labor...
State Battles
City council votes to repeal collective bargaining for some workers  WANE.com   ...In a 7-2 vote Tuesday night, Fort Wayne City Council approved an ordinance that will remove collective bargaining for some city workers. Council members had three ordinances to vote on Tuesday that would affect collective bargaining rights for most of the city’s union workers...
Scientists: Florida's congressional map is 'partisan gerrymander'  Orlando Sentinel   ...The coalition of groups trying to prove Florida's congressional map was intentionally gerrymandered to help Republicans turned to experts Tuesday who testified it was "virtually impossible" to have drawn the maps without political bias...
War On Workers
Supreme Court case could impact public unions   Philadelphia Inquirer   ...A largely overlooked Supreme Court case has the potential to fundamentally alter the right of public employees to unionize — and a ruling could be handed down as early as this week...
American jails have become the new mental asylums – and you're paying the bill (opinion)  Guardian   ...As sheriff, I run the Cook County Jail, the largest jail on a single site in the country with approximately 10,000 inmates on any given day – and approximately 30% of them suffering from a serious mental illness...
How Tech Companies Tricked A Generation Into Working For Free  Forbes   ...Valve’s Steam service is building an ecosystem of unwaged user productivity, selling games through its “Early Access” program, essentially allowing game developers to charge players to beta test their games in exchange for the flattering thrill of seeing something before it’s ready...
The Worst Places On The Planet To Be A Worker  Huffington Post   ...The U.S., embarrassingly, scored a 4, indicating "systematic violations" and "serious efforts to crush the collective voice of workers."s...
Walmart's Penny Pinching Doesn't Extend To Executives, Says Report  Gawker   ...The problems afflicting crap mecca Walmart extend beyond its persecuted workforce, all the way into the corporate executive suite. A new report from an outside overseer says the famously cheap company doesn't mind burning tons of money to benefit top executives...
Walmart Workers Launch Effort To Unseat Rob Walton As Chair  Forbes Magazine   ...Walmart has a new CEO in Doug McMillon, a one-time warehouse worker who took over the top job this year. Is it time for a new chairman too? A coalition of Walmart workers believe so, and they're mobilizing fellow shareholders in an effort to boot billionaire Rob Walton off the board at the big box giant's annual meeting on Friday, June 6...
Miscellaneous
VA investigators: Delayed care is everywhere  USA Today   ..."Our reviews at a growing number of VA medical facilities have thus far provided insight into the current extent of these inappropriate scheduling issues throughout the VA health care system and have confirmed that inappropriate scheduling practices" are widespread, the report said...
R.I.P., Maya Angelou, Proud Gun Owner and User  National Review   ...Angelou also emerged very late in life as an off-hand supporter of the right to bear arms. In a 2013 interview with Time magazine’s Belinda Luscombe, the ancient poetess talked Star Trek and death (“I’ll probably be writing when the Lord says, ‘Maya, Maya Angelou, it’s time’”), but she also recounted how she used a gun for home defense...

Walmart executive gets big bonus because food stamps were cut

Walmart workers ready to strike for fair pay and the right to
organize.

A lousy year for Walmart means employees get their hours cut but top executives get multimillion dollar bonuses. 

Many Walmart employees can't make ends meet because their wages are so low. Most of them take home less than $25,000 a year, and are forced to seek public assistance. The average full-time salary is only $27,000 a year.

Last year was a bad year for Walmart, and associates earned even less because they worked fewer hours. Top executives, though, got rewarded -- because Congress cut the food stamps that so many of their employees rely on.

The New York Times explains:

Consider the case of William S. Simon, president and C.E.O. of Walmart’s United States unit. Under Walmart’s pay plan, he would receive some incentive pay if sales grew more than 2 percent. 

The trouble was, Walmart’s United States sales rose only 1.8 percent in fiscal 2014. That meant Mr. Simon would miss his threshold. 

Enter the adjustments. 

After adjusting for certain items relating to the company’s sales, the Walmart unit eked out a growth rate of 2.03 percent in 2014. On the strength of that “adjusted” performance, Mr. Simon received $1.5 million, the proxy noted. His total compensation was $13 million last year. 

What adjustments helped Mr. Simon clear the bar? One action that the company took was to eliminate the decline in its United States sales that occurred after the government cut food stamp benefits — formally known as the Supplemental Nutrition and Assistance Program, or SNAP — by 5 percent last November. 

That reduction in benefits hurt Walmart’s sales, the company acknowledged, because many customers use food stamps in its stores. 

But for executive-pay purposes, that sales decline never happened. And that meant a bigger payday for Mr. Simon.

Today's Teamster News 11.15.13

Teamsters Support Walmart Strikers   teamster.org   ...Teamsters are out front supporting Walmart worker protests in the run-up to the nationwide strike planned for Friday, Nov. 29, or Black Friday. Walmart workers want respect, a living wage and the right to form a union...
Teamsters Support 'SAFE SKIES ACT Of 2013  teamster.org   ...The Teamsters Union applauds today’s re-introduction of the ‘Safe Skies Act of 2013’ by Sen. Barbara Boxer (D-CA). The bill would bring air cargo and supplemental pilots under the same safety regulations as air passenger pilots, standardizing rules within the industry...
Teamsters Condemn Cab Commission's Denying Driver Time To Speak At Public Meeting  DCist   ...At yesterday's extremely chaotic D.C. Taxicab Commission meeting, which was attended by over one hundred city cabbies, a driver without copies of his testimony for the commissioners was told he could not speak...
Maine Teamsters Endorse Michaud For Governor, Jackson For Congress  Teamsters Local 340   ...Teamsters Local 340 in South Portland, Maine announced that its executive board unanimously voted to endorse both Rep. Mike Michaud (D-2nd District) in his run for governor and State Senator Troy Jackson who is running for the 2nd Congressional District seat being vacated by Michaud...
Hoffa: Lawmakers Increasingly Realize Fast Track Is a Fraud  Huffington Post   ...The Teamsters for years have been an outspoken critic of fast-track trade authorization which allows bad proposed trade agreements to move through Congress on just a quick up-or-down vote. And in the last week, we were joined by 185 House lawmakers who feel the same way...
The more you know about the odious Trans-Pacific Partnership, the less you’ll like it  The Guardian   ...That is why it's been negotiated in secret meetings dominated by governments and corporations...
US trade deficit widened 8% in September  Associated Press   ...imports increased to the highest level in 10 months while exports slipped. The wider gap suggests growth was somewhat slower over the summer than previously estimated...
US mobility for young adults falls to 50-year low  Associated Press   ...Among adults ages 25-29, just 4.9 million, or 23.3 percent, moved in the 12 months ending March 2013. That's down from 24.6 percent in the same period the year before. It was the lowest level since at least 1963. The peak of 36.7 percent came in 1965, during the nation's youth counterculture movement...
Facebook and Microsoft help fund rightwing lobby network, report finds  The Guardian   ...State Policy Network rejects climate change, opposes workers' rights – and is backed by some top US tech and telecoms firms...
Koch-backed nonprofit spent record cash in 2012  Center for Public Integrity   ...Americans for Prosperity — the main political arm of billionaire industrialist brothers Charles and David Koch — spent a staggering $122 million last year as it unsuccessfully attempted to defeat President Barack Obama and congressional Democrats, according to a Center for Public Integrity review of documents filed in Colorado...
How McDonald's And Walmart Became Welfare Queens  Bloomberg   ...It seems that welfare queens are back in the news these days. This time, they are even bigger, richer and less deserving of taxpayer support...
An example of how the banking cartels control countries  the unbalanced evolution of homo sapiens   ...The biggest private banks created a complex financial environment with complex financial destructive "tools" which governments are unable to manage. Governments are forced to turn to the same banks for "advising services" while they are flooded with former bank executives placed in key positions. This explains why the biggest private banks receive bailout packages of billions at the expense of taxpayers, loading governments with more debt...
Justices grill lawyers over neutrality agreements between employers and unions  Washington Post   ...Supreme Court justices seemed reluctant Wednesday to disallow a type of agreement between employers and unions that has become increasingly important to the labor movement as it tries to grow its ranks...
Poverty Is America's #1 Education Problem (opinion)  AlterNet   ...Teachers' unions are not the reason America's schools are in trouble...
Troubled Youth Prison Company Wins Even More Contracts  Huffington Post   ...Despite voluminous evidence that inmates have suffered violence, sexual abuse and neglect inside the facilities of a private juvenile prison operator, the state of Florida has in recent weeks awarded fresh contracts to the company...
Lockheed to cut 4,000 jobs as U.S. government spending wanes  Reuters   ...Defense contractor Lockheed Martin Corp said on Thursday it plans to cut 4,000 jobs, or more than 3 percent of its worldwide workforce, to cope with declines in U.S. spending...
Swiss voters likely to reject salary cap bill for executives  Raw Story   ...Swiss voters look set to reject a law to rein in executive pay in a looming referendum, with a poll released Wednesday showing only around a third back the plan...
German union's incoming boss warns VW about avoiding unions  Reuters   ...The incoming leader of an influential German union warned Volkswagen AG on Wednesday about trying to avoid unions in Tennessee, where the German automaker has an assembly plant...
Giant, Safeway workers authorize possible strike   Washington Post   ...Unionized employees at Washington area Safeway and Giant Food stores voted Wednesday to authorize a strike against the grocery chains if the two parties fail to agree on a new contract...
Any proposal to ban BART workers from striking is not a simple matter (opinion)  San Francisco Examiner   ...The California Supreme Court has gone back and forth on whether public-sector employees, such as these BART workers last month, are allowed to walk off the job...
Boeing machinists soundly reject labor deal Reuters   ...Boeing machinists soundly rejected an eight-year labor contract extension on Wednesday that would have let them build the company's newest jetliner in Washington, a historic decision that could forever alter the course of Boeing's 97-year presence in the state...

McKesson workers more stressed than overpaid CEO

John Hammergren might think he's worth the $51.7 million he takes home from McKesson, the health care company he heads. After all, he puts up with a lot of stress.

He'd be wrong.

Keith Payne in Scientific American recently described the kind of stress CEOs like Hammergren put up with:

...one CEO ... had to drag himself out of bed each morning and muster his game face. It would be a long day of telling other people what to do. It got so bad ... he had no choice but to take a year off work to sail across the Atlantic Ocean with his family.

Poor thing!

But it turns out it isn't the people at the top who experience the most stress. It's actually the people at the bottom -- like the McKesson workers who don't take home enough money to afford health care.

A recent study of people taking executive courses at Harvard's business school divided the group into leaders and non-leaders. The conclusion?

On both surveys of anxiety and biological measures of cortisol, the leaders showed substantially lower levels of stress than the non-leaders. The results were the same in both business and the military. Leadership has its privileges.

Another study in the '60s showed British civil servants had more stress-related health problems the lower down on the rung they were.

Concludes the author,

The professional class may be stressed in their way. But the powerless are stressed in the way that kills. 

Today's Teamster News 04.01.13

As OSHA emphasizes safety, long-term health risks fester  Herald Tribune   ...OSHA devotes most of its budget and attention to responding to here-and-now dangers rather than preventing the silent, slow killers that, in the end, take far more lives...
Pay for Boards at Banks Soars Amid Cutbacks  New York Times   ...Since the financial crisis, compensation for the directors of the nation’s biggest banks has continued to rise even as the banks themselves, facing difficult markets and regulatory pressures, are reining in bonuses and pay...
Bank of Cyprus depositors to face up to 60 percent losses  McClatchy   ...Depositors in Cyprus with savings of more than 100,000 euros ($128,000) could face losses of up to 60 percent, under tough conditions attached to an international bailout, Finance Minister Michalis Sarris said Saturday...
Foreclosed 'Zombie' Homes Exceed 300,000 Properties: Study  Reuters   ...A national survey found 301,874 "zombie" properties dotting the U.S. landscape in which homeowners in foreclosure have moved out, leaving vacant property susceptible to vandalism and degradation. Florida tops the list of zombie properties with 90,556 vacant homes in foreclosure...
North Dakota, socialist haven?  Salon   ...North Dakota ... fully supports its state-owned Bank of North Dakota (BND), a socialist relic that exists nowhere else in America. ... it works...
Minnesota Brown: Asia expands influence over Iron Range economy  MinnPost   ...Whether it's iron, grain or now airplanes, it's interesting to see how China, India and other emerging nations are shaping the future of northern Minnesota's economy...
Detroit Public Schools Emergency Manager Roy Roberts boldly lies on national television about his “success”  eclectablog   ...The first Emergency Financial Manager, Robert Bobb, actually left the school district in a bigger financial hole than when he arrived...
Odor Problems Elsewhere for Owners of Bridgeton Landfill  CBS News   ...Republic Services Inc., owners of the Bridgeton Sanitary Landfill, ranked near the bottom of a 2009 Newsweek list of 500 major corportions for their track record on enviornmental issues — and 46th of 50 in their industry...
Teamsters shine in autism fund-raiser  Boston Globe   ...Teamsters Local 25 held its annual Light Up the Night Gala on Saturday to raise money for autism research. Angela Peri’s Boston Casting helped with the night by donating items from local films for auction...

Fired JPMorgan exec to take home $32M

The JPMorgan Chase executive responsible for the trading operation that lost the bank at least $2 billion and as much as $5 billion will leave her job with $32 million.

The Telegraph reports,

Ina Drew, the executive who ran the department behind JP Morgan's $2bn (£1.2bn) trading loss, has left the bank and will walk away with about $32m... 

One of the best paid women on Wall Street, Ms Drew last year received a remuneration package worth $15.5m. 

Corporate filings show that following her resignation she is entitled to $400,000 in severance as well as a share award that was worth $16m yesterday. On top of this, she has unexercised options that were valued at the end of last year at $3.44m, a series of retirement benefits worth a further $2.63m, and a $9.87m deferred compensation pot built up over several years.

This kind of greed and irresponsibility is all-too-familiar to Hostess Teamsters. They've watched the company's top management help themselves to big paydays while driving the company into bankruptcy.

It's also familiar to employees of firms that Mitt Romney's company took over. Romney yanked as much money as he could out of the companies, kick them to the curb and then hide his loot in a Swiss bank account.

The 1% isn't smarter than the rest of us, or more competent. They've just rigged the rules for themselves.

Whoa! This CEO took $750M out of his company

John Hammergren has taken $750 million out of McKesson, Inc., in the 13 years he's served as chairman and chief executive of the company.

By most accounts, Hammergren's been a pretty good, B-B-plus kind of CEO. He righted the company after an accounting fraud scandal, but he blew a lot of money on health technology and a surgical supply business that never took off. And there was a teensy little price-manipulation scandal ($442 million settlement) during his tenure.

One former accounting professor says his $750 million paycheck is basically theft. We tend to agree. And it's theft from you if you happen to own stock in an S&P 500 fund. (Check to see what your 401(k) is invested in.) The reason is that Hammergren has taken much of his compensation in the form of stock options. Reports The Daily Beast:

“As far as I’m concerned, a board that keeps loading up its chief executive with more stock and options each year is, from a shareholder perspective, basically committing theft,” says Albert Meyer, a former accounting professor who runs a money-management firm called Bastiat Capital....Options aren’t free; they dilute the worth of everyone’s shares. And the practice hurts more than the privileged few. Anyone who owns an index fund of the country’s 500 largest companies owns shares in McKesson, a Fortune 500 company. “It’s nothing short of a massive wealth transfer from the retirement accounts of middle-class Americans to a privileged few,” hidden in the guise of stock-option programs like McKesson’s, Meyer argues.

You'd think these CEOs would have some shame and take a little bit of a pay cut at a time when ordinary people's wages are falling.  You would be wrong. According to the Huffington Post, CEO pay rose between 27 percent and 40 percent last year. Terrorist supporter JPMorgan Chase CEO Jamie Dimon got a $19 million raise last year, and perjurer Goldman Sachs CEO Lloyd Blankfein got an extra $3.6 million.

Kind of turns your stomach.

Today's Teamster News 02.07.11

Governors Chop Spending  Wall Street Journal   ...Governors around the U.S. are proposing to balance their states' budgets with a long list of cuts and almost no new taxes, reflecting a goal by politicians from both parties to erase deficits chiefly by shrinking government...
Labor Fumes over Democrats' Charlotte Pick  Politico   ...They picked the least unionized state in the entire country...
Obama Reaches for Corporate Support  Wall Street Journal   ...President Barack Obama will ask some of his toughest business critics at the U.S. Chamber of Commerce on Monday to back his economic agenda...
Companies Fight Back on Executive Pay  Wall Street Journal   ...Some companies are ... denouncing proxy-advisory firms that tell shareholders how to vote...
Another year of mystery for SF's high-speed rail path  nbcbayarea.com  ...The High-Speed Rail Authority announced that it will keep plans for the region under wraps until 2012...
NW Ohio Train Jumps Tracks, Massive Ethanol Fire Forces Evacuations  Indiana's News Center   ...A huge fireball that could be seen for up to 15 miles erupted following a train derailed in Hancock County, Ohio early Sunday morning...
NLRB Cools Legal Threat Vs. States Over Card Check  Investor's Business Daily   ...The National Labor Relations Board has backed off from threats to sue four states to stop them from enforcing new anti-card check state constitutional amendments...Say yes to the Keystone pipeline  (Opinion)  Washington Post   ...Washington Post   ...Oil sands crude is nasty, and the sooner the world stops burning it, the better. But that's actually not much of a reason to kill the pipeline...

Today's Teamster News 11.15.10

Paychecks for CEOs Climb  Wall Street Journal   ...The chief executives of the (456) largest U.S. public companies earned median compensation of 7.23 million, up 3 percent ...
Korean 'free trade' deal duplicates NAFTA  firedoglake  
So... Are Government Workers Overpaid?  The Note

Great Recession may scar young workers for life  newsobserver.com
Grocery Workers Will Go Back to Bargaining Table  HeraldNet.com  ...talks will resume ...on Thursday and Friday (for) workers with grocery chains in Snohomish, King, and Kitsap counties...The workers are represented by two UFCW locals and by Teamsters Local 38. Increase in rail, truck shipments points to economic recovery  Kansas City Star

Graduate Students, Unions Rally in Downtown Berkeley  Daily Californian

Today's Teamster News 10/12/10

Supermarkets, Teamsters have five-year deal The Press-Enterprise ...Warehouse workers and drivers overwhelmingly ratified a ... contract with Southern California's major grocery chains ... giving workers pay increases and holding the line on their medical costs...

Union attacks Rite-Aid for delaying severance talks Observer-Dispatch ...Rite Aid has repeatedly refused to provide financial documents supporting their decision to close the facility and move some workers to a non-unionized Liverpool distribution center as a cost-saving measure...

Ohio Attorney General Fights Against Wall Street New York Times ...Richard Cordray in two years in office has ... sue(d) early and often, filing lawsuits against global financial houses, rating agencies, subprime lenders and foreclosure scammers...

Wall Street Pay: A Record $144 Billion Wall Street Journal ...Pay on Wall Street is on pace to break a record high for a second consecutive year...

Unemployed find old jobs now require more skills Associated Press ...some of the jobless no longer even qualify for their old positions...

Links 09/02/10

Factory Growth Buoys Markets Wall Street Journal ...Growth in manufacturing activity accelerated last month in both the U.S. and China.

Parsing an Ascendant GOP's Economic Prescriptions Wall Street Journal ...The closest Republicans come to a public economic agenda are speeches by their House leader, John Boehner, who promises more detail later.

The Real Say on Pay (editorial) New York Times ...the new financial reform law ... requires companies to disclose the ratio between a chief executive’s pay package and that of a typical employee.

Schwarzenegger, union argue furlough case next week The State Worker ...the California Supreme Court will hear debate next week over whether the governor has illegally forced state workers to take unpaid days off from work.

Unions Spurn Democrats Seen as Turncoats on Health, Organizing Bloomberg News ...organized labor helped Democrats win ... two years ago, only to find some candidates they supported didn’t return the favor.

More people living paycheck to paycheck Kansas City Star ...A survey ... this summer, found that nearly eight out of ten workers said they are living paycheck to paycheck.

American Workers Believe Economic Conditions Will be Same or Worse Next Year Industry Week ...American workers are deeply pessimistic about prospects for economic recovery...