(CNSNews.com) – The nation’s largest labor federation, the AFL-CIO, has updated one of its Web sites that details the salary and benefits of top executives from 946 American corporations. The site also features so-called case studies of the CEOs, as well as an interactive game called “Boot the CEO.”
A leading critic of the AFL-CIO’s tactics, however, said most of the CEOs on the list are likely being targeted because they work for companies whose employees are not unionized or who have chosen not to unionize.
The Web site, “2009 Executive PayWatch,” lists executives by industry and by individual company, and provides tables for each chief executive’s pay structure, showing how much he or she makes in relation to average hourly workers. The site takes its data from each company’s Securities and Exchange Commission (SEC) filings through the end of March 2009.
Last year’s PayWatch site profiled 3,000 CEOs from all sectors of the economy. The AFL-CIO hopes to reach that number again this year as it updates its executive pay database.
The “case studies” on the PayWatch site criticize the pay structures of 10 companies, including AIG and Bank of America, using more detailed figures to show what the AFL-CIO thinks are excessive pay structures.
The criticism is leveled at executives for earning more than hourly workers and the benefits they receive, as opposed to using market trends and data to analyze how and why executive pay structures take the form they do.
“Excessive executive compensation has taken center stage since the government bailout of banks that began in September 2008,” states the Web site. “Americans have expressed outrage as CEOs and other executives responsible for the financial crisis have pocketed millions of dollars from bonuses and golden parachutes. CEO perks alone grew in 2008 to an average of $336,248 – or nine times the median salary of a full-time worker.”
“Meanwhile, the economy tanked for working people while many companies were bailed out with more than $700 billion in taxpayer money, as well as low-interest loans and guarantees,” states PayWatch.
The site also claims that viewers can “compare your pay to the CEOs, learn more about executives enjoying job and retirement security while fighting to keep workers from getting contracts, find out what you can do to put balance back into our economy ….”
The primary criticism is that CEO pay schemes are not tied to performance. However, one of the case studies shows that a CEO of a large, bailed-out bank has been strongly “incentivized” to turn his struggling bank around.
The profile of Sun Trust Bank CEO James Wells details how shareholders approved a large stock option package days before President Obama signed legislation limiting firms’ ability to do so. Under the stock option agreement, when Wells cashes the stock in, he will get the current market price for each share.
If Sun Trust’s stock rises from its current value of around $9 per share, Wells would make a substantial sum of money from the 852,941 shares in the company he runs – a fact the AFL-CIO acknowledges on the PayWatch site.
“The stock option would reward Wells with millions of dollars,” the study says, “if the company’s stock price rebounds.”
In addition to Wells, the nine other firms the AFL-CIO called the “worst of the worst” are:
-- AIG, whose current CEO was hired by the federal government for $1 per year.
-- Bank of America, which saved failing investment firm Morgan Stanley in exchange for increased federal aid.
-- Deere & Co, maker of John Deere tractors, which the AFL-CIO criticized for giving its CEO, Robert Layne, a retirement plan that was too secure.
-- FedEx, criticized because CEO Frederick Smith opposes unionization and card-check legislation but would receive a severance package if FedEx fails or is bought out.
-- Occidental Petroleum for paying $400,000 to prepare CEO Ray Irani’s taxes, even though the company requires senior executives to have their taxes prepared by a professional.
-- The Shaw Group, a Louisiana-based construction firm, for providing CEO Robert Shaw’s family with death benefits the AFL-CIO describes as “extraordinary,” including life insurance and health benefits.
-- Toll Brothers Inc. which the AFL-CIO says gave CEO Robert Toll too much in stock options in the company he founded.
-- Tyson Foods, which the AFL-CIO criticized for offering former CEO Richard Bond an unknown amount of severance pay when he resigned Jan. 5 due to the company’s poor performance. Since Tyson has not released the details of Bond’s severance package, the AFL-CIO criticized severance packages in general in the study.
-- Wal-Mart, which the labor giant criticized because it paid for its executives to have yearly physical exams not covered by the company’s health plan.
Stefan Gleason, vice president of the National Right to Work Foundation, told CNSNews.com that one reason the AFL-CIO might highlight these firms is because most of them are active targets for union organizers.
“You know what they all have in common,” Gleason said. “They’re all union organizing targets. That’s the criteria for what makes it excessive. What makes it excessive is that these are all companies whose employees have all rejected unions.
“If they were to do so [form unions], then all of a sudden they’d be model CEO of the year, great public citizen, [so] that’s what that’s about,” said Gleason.
The union told CNSNews.com that the point of the site is to provide transparency into how executives are compensated and expose those which the labor group thinks have earned too much.
“We have done this since 1997 and the idea has been to shed light and transparency on the CEO and executive compensation,” AFL-CIO spokeswoman Amaya Smith told CNSNews.com.
“We specifically looked at 10 corporations that we felt were guilty of the most excessive compensation practices that we had seen,” she said. “We looked at what we thought were the worst of the worst.”
Smith admitted, though, that the AFL-CIO had no litmus test to determine what exactly made one executive salary worse than another, saying that her union did not have a method for determining what constituted excessive pay. Smith added that not every company on the PayWatch list paid its executives too much.
“The idea of the site is not to say that all CEOs are guilty of being egregiously compensated,” Smith said. “[But] I don’t think anybody has a litmus test for what is excessive.”