The F Word: Shareholders Fight Back as Democrats Compromise
The ink on the compromise that kept the government open—barely--isn't even dry and they're already talking about the next round of cuts in Washington.
The New York Times led off this week with an article about Obama's plan to reduce the deficit by making unspecified “changes” to Medicare, Medicaid and Social Security. Sure, it also mentions increasing taxes and cutting military spending, but when we're embracing the conservative frame that entitlement programs are too big, that's not much to cheer about.
Meanwhile, of course, CEOs are raking in the cash and still not hiring, at least not Americans. Daniel Costello wrote in the Times this weekend that top executive pay at 200 major companies was up 12 percent from last year—a median pay rate of $9.6 million. Viacom's CEO made $84.5 million in just nine months, and Ray Irani at Occidental Petroleum's pay went up 142 percent from last year.
The Dodd-Frank financial regulation package includes rules that give shareholders a say on executive pay, Costello notes, but they are mostly cheerily ignoring them. H.P. got a grade of D on an A to F scale for its pay packages, but rejected criticism—until its shareholders voted against approving the pay rates. Now they're “under review.”
But Beazer Homes' chief executive had to return $6.5 million of his compensation in a settlement with the S.E.C. over inaccurate financial statements. Activist shareholders can't do it alone, but some government support could help.
So here's an idea, President Obama. Instead of changing wildly popular programs that keep Americans healthy and secure, take those CEO pay numbers and make a speech about them. Take it on the road, to Ohio, Wisconsin, Indiana, Pennsylvania, New Jersey, Florida, and anywhere conservative governors are attacking working people's rights. If shareholders are angry, imagine how angry everyone else will be.
You'll have support for taxing the rich faster than you can say “deficit.”