Tuesday, October 29, 2013

Shouldn't CEOs get the same treatment as the Bishop of Bling?

Pope Francis set a good example for corporate boards when he busted the Bishop of Bling, argues Brother Larry Cohen, president of the Communications Workers of America.

The pontiff recently suspended German Bishop Franz-Peter Tebartz-van Elst, who spent $42 million to renovate his luxurious residence and billed the Vatican for it. The mansion may be turned into a soup kitchen or a refugee center

The Roman Catholic Church's new pope is a refreshing change to the aristocratic leaders we've been saddled with in the last few decades. He chose the name of a saint who lived among the poor. He lives in Spartan rooms, drives a 1984 Renault and wears loafers instead of the handmade red slippers of his predecessors.

CWA's Cohen, in a recent Huffington Post, says corporate boards of directors should follow the pope's example, "banishing imperial CEOs and rejecting royal pay package demands."

A corporate board demeans its employees when it awards a CEO 1,287 times what it pays the typical worker for his labor and loyalty, writes Cohen.

Someone actually did make 1,287 times what the median worker at his company got paid: Larry Ellison, CEO of technology giant Oracle, according to a Bloomberg estimate.

Teamsters are especially unhappy with McKesson CEO John Hammergren, who took home $57 million last year. Newly organized Teamsters at McKesson's Lakeland, Fla., warehouse don't make enough to afford health care.

Cohen cites British economist Andrew Smithers, who figures American companies in the 1970s devoted 15 times as much capital to investments  as they distributed to shareholders. Writes Cohen:
Now it's less than 2 to 1. Today, CEOs suck out companies' value rather than building for the future.
The Securities and Exchange Commission (SEC) is proposing to shame imperial CEOs by requiring them to disclose the ratio of worker pay to CEO pay.

You can bet the SEC is hearing from corporate lobbyists to squelch this proposal. If you'd like the SEC to hear your voice as well, you can send a comment letter. Just click here and follow the easy instructions.