Sen. Sheldon Whitehouse (D-RI) amplified a post today by Congresswoman Barbara Lee (D-CA) depicting soaring CEO pay that the two lawmakers — along with Representative Alexandria Ocasio-Cortez (D-NY) — have targeted as an indicator of the “extreme income inequality” that progressives consider dangerous to the American economy and a besmirchment of the country’s founding principles.
With the chart below, Whitehouse urges Congress to pass the CEO Act, legislation designed to curb exorbitant CEO pay that the three lawmakers introduced last fall. As Whitehouse writes, referencing the graphic, “Executive compensation is (literally) off the charts.”
The legislation is designed to apply a tax to any company where the CEO makes more than fifty times the salary of the company’s workers — “an excise tax on public and private companies that have at least a 50 to one CEO-to-median-worker pay disparity.”
Can you guess which color on the graph below represents CEO pay without looking at the key?
— Rep. Barbara Lee (@RepBarbaraLee) January 4, 2024
Executive compensation is (literally) off the charts.
In 2024, Congress must pass our #CEOAct to rein in extreme income inequality and ensure ALL workers are paid fairly. pic.twitter.com/OUSbslrLzm
In introducing the CEO Act, Lee leaned on an extraordinary statistic, revealing that “right now, the average CEO makes in one day what the average worker makes in ten months.” She called the CEO Act a way to battle “decades of this extreme, corrosive inequality.”
Whitehouse and company aren’t just railing against a straw man to curry favor with workers in the electorate. The Executive Suite has gone to the moon in the last half century, while workers have remained decidedly earthbound. One Economic Policy Institute study showed executive pay having risen 1,209.2% since 1978 compared with a 15.3% rise in typical workers’ pay.
The CEO Act proposed 50-to-1 ratio before an excise tax applies would still leave CEOs nearly 150% better off than they were in 1965, when CEO pay was approximately 21 times more than the average worker. In 2022, CEO pay was 344 times what the typical worker brought home.
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