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A CORE FRUSTRATION UNITES STRIKING WORKERS: EXORBITANT CEO PAY

By Allison Morrow, CNN
Updated 8:59 AM EDT, Tue September 19, 2023
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New York CNN  — 

There’s a common thread linking the two biggest labor protests in America right
now: Workers want a living wage after years of stagnant or falling pay, while
across the bargaining table sit executives whose compensation has been growing
wildly year after year.

Exorbitant CEO pay is a frustration shared by Hollywood creatives and Detroit
autoworkers alike.

It’s not that anyone expects the bosses to be paid the same as everyone else,
but the gulf between the C-suite and the rank-and-file has been widening at an
alarming rate for decades, with regular workers wages often stagnating or
falling when adjusted for inflation.

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Since 1978, the CEO compensation among America’s 300 biggest companies has gone
up 1,460%, while the typical worker’s pay grew by just 18% (both adjusted for
inflation), according to the Economic Policy Institute, a progressive think
tank.

In the same period, those CEOs’ compensation grew 37% faster than stock market
growth, according to EPI.

WAYNE, MICHIGAN - SEPTEMBER 16: United Auto Workers members strike at the Ford
Michigan Assembly Plant on September 16, 2023 in Wayne, Michigan. This is the
first time in history that the UAW is striking all three of the Big Three auto
makers, Ford, General Motors, and Stellantis, at the same time. (Photo by Bill
Pugliano/Getty Images)
Bill Pugliano/Getty Images

Autoworkers strike enters its fourth day. Now automakers face another walkout

That frustration is particularly acute in the US auto industry, which nearly
collapsed in 2008 before the federal government injected $80 billion in taxpayer
money into bankrupt Chrysler and GM.

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At the time, President Barack Obama emphasized how the government assistance
would ensure “a new beginning for a great American industry” that would create
new jobs and unleash “new prosperity.”

To save the auto industry, union workers agreed to temporarily freeze wages and
give up certain pension and health care benefits.

Their reward? Average hourly earnings for workers in car manufacturing have
fallen about 19%, adjusted for inflation, EPI Senior Economist Adam S. Hersh
wrote last week.

Over the same period, CEO pay at the Big Three Detroit automakers — GM, Ford and
Chrysler parent Stellantis — has jumped an average of 40%, or roughly how much
of a raise striking workers are now demanding.

GM CEO Mary Barra, the highest-paid executive among the Big Three, made $29
million last year, representing a 34% increase over the last four years.

In an interview with CNN’s Vanessa Yurkevich on Friday, Barra sought to defend
her compensation package, noting that “92% of it is based on performance on the
company.”

That comment refers to the fact that most of her compensation is tied to GM’s
stock and bonus incentives set by the automaker’s board. (Barra enjoys a base
salary of $2 million.) Critics of performance-based executive pay say those
metrics are less than objective.

General Motors CEO Mary Barra during an interview with CNN's Vanessa Yurkevich
in Detroit on September 15.
CNN

GM CEO Mary Barra tells CNN she's 'frustrated' about the strike

For example, a CEO may get a multimillion-dollar bonus as a reward for the
company hitting a profit target (as Barra did in 2021). But a company’s profit
depends not only on bringing in hearty revenue, but also on keeping costs —
including workers’ pay — low.

Among the other Big Three: Stellantis’ CEO Carlos Tavares made $24.8 million
last year, a 22% increase from the year before. And Ford CEO Jim Farley took in
$21 million in compensation last year, a figure that has nearly doubled since
2020, when he was promoted to the top role from chief operating officer.

The Writers Guild of America says the median pay for screenwriters has dropped
14% when adjusted for inflation over the past five years.
Michael M. Santiago/Getty Images

Similarly, the average pay for Hollywood’s top executives climbed to $28 million
in 2021, up 53% from 2018, according to a Los Angeles Times analysis. The
Writers Guild of America, which has been on strike since May, says the median
pay for screenwriters has dropped 14% when adjusted for inflation over the past
five years.

UAW President Shawn Fain has argued that the union workers are simply asking for
a similar raise that reflects the companies’ performance in recent years.

“In the last four years, the price of cars went up 30%. CEO pay went up 40%… No
one had any complaints about that, but God forbid the workers ask for their fair
share,” he told CNN’s Jake Tapper last week.

This year, the Big Three are expected to bring in more than $32 billion in
collective profit.

The companies argue those profits are needed to finance the biggest change in
the industry in nearly a century: the shift to electric vehicles.

None of the legacy automakers’ EVs make up more than a sliver of their current
sales, but they expect growing demand in the coming years and tougher
environmental regulations imposed by governments around the world.

They also see it as a path to be more profitable, in part because an EV has far
fewer moving parts than a gasoline-powered car with its complex engines and
transmission. (EVs require about 30% less labor to assemble than a
gasoline-powered car, according to industry estimates.)

And the automakers are poised to receive taxpayer-funded incentives to support
their EV transition.

Union leaders agree that EVs are part of the future, but they worry the Big
Three may simply move EV manufacturing to states in the American South that are
overwhelmingly non-union. Ford, for one, has already poured billions into
production campuses in Kentucky and Tennessee that will produce EV batteries and
trucks.

“Despite all the company tricks, there is more than enough money for them to
make EV investments, to pay their workers a fair share, and to maintain healthy
profits,” Hersh wrote. “Their interests would be better served by quickly
resolving these negotiations, building our transportation future with their own
workers fully vested in a shared vision, and signaling to workers in competing
foreign ‘transplant’ producers and new upstarts like Tesla what their labor is
really worth.”

—CNN’s Chris Isidore contributed to this article.


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OUR USE OF COOKIES AND OTHER TECHNOLOGIES

We, our Affiliates and Vendors use cookies and other technologies to process
personal data (including device identifiers and IP addresses) for the following
purposes: Store and/or access information on a device, Select personalised ads,
Create a personalised ads profile, Create a personalised content profile, Select
personalised content, Measure content performance, Apply market research to
generate audience insights, Develop and improve products, Select basic ads and
Measure ad performance. Privacy Policy

By clicking “Accept All” you agree to these purposes. For more information, to
provide or withdraw consents for processing your personal data, click “Manage
Cookies+.” Additionally, you may exercise your preferences for consent at a
vendor level in the “Vendors” link. These settings are accessible on a site or
app specific basis, at any time through the ‘Manage Cookies+’ link located at
the footer of webpages or in application settings. We work in coordination with
an industry framework which will signal your preferences to our participating
vendors. Vendors

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MANAGE COOKIES+

We process your personal data to personalize content and ads, measure the
delivery of such content and ads, to provide social media features, to extract
insights about our properties and as otherwise specified in our Privacy Policy.
We share this information with our Affiliates and Vendors on the basis of
consent. You may exercise your right to consent to a specific purpose below.
Additionally, you may exercise your preferences for consent at a vendor level in
the “Vendors” link under each purpose. These choices will be signalled to our
vendors participating in the Transparency and Consent Framework.
Privacy Policy
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PLEASE NOTE: CONSENT TO STORE AND/OR ACCESS INFORMATION ON A DEVICE IS REQUIRED
TO CUSTOMIZE AND IMPROVE YOUR EXPERIENCE

STORE AND/OR ACCESS INFORMATION ON A DEVICE

Store and/or access information on a device

Cookies, device identifiers, or other information can be stored or accessed on
your device for the purposes presented to you.

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SELECT BASIC ADS

Select basic ads

Ads can be shown to you based on the content you’re viewing, the app you’re
using, your approximate location, or your device type.

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SELECT PERSONALISED ADS

Select personalised ads

Personalised ads can be shown to you based on a profile about you.

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CREATE A PERSONALISED ADS PROFILE

Create a personalised ads profile

A profile can be built about you and your interests to show you personalised ads
that are relevant to you.

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SELECT PERSONALISED CONTENT

Select personalised content

Personalised content can be shown to you based on a profile about you.

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CREATE A PERSONALISED CONTENT PROFILE

Create a personalised content profile

A profile can be built about you and your interests to show you personalised
content that is relevant to you.

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MEASURE AD PERFORMANCE

Measure ad performance

The performance and effectiveness of ads that you see or interact with can be
measured.

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MEASURE CONTENT PERFORMANCE

Measure content performance

The performance and effectiveness of content that you see or interact with can
be measured.

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APPLY MARKET RESEARCH TO GENERATE AUDIENCE INSIGHTS

Apply market research to generate audience insights

Market research can be used to learn more about the audiences who visit
sites/apps and view ads.

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DEVELOP AND IMPROVE PRODUCTS

Develop and improve products

Your data can be used to improve existing systems and software, and to develop
new products

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ENSURE SECURITY, PREVENT FRAUD, AND DEBUG

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Your data can be used to monitor for and prevent fraudulent activity, and ensure
systems and processes work properly and securely.

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TECHNICALLY DELIVER ADS OR CONTENT

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Your device can receive and send information that allows you to see and interact
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MATCH AND COMBINE OFFLINE DATA SOURCES

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Data from offline data sources can be combined with your online activity in
support of one or more purposes

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LINK DIFFERENT DEVICES

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Different devices can be determined as belonging to you or your household in
support of one or more of purposes.

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RECEIVE AND USE AUTOMATICALLY-SENT DEVICE CHARACTERISTICS FOR IDENTIFICATION

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Your device might be distinguished from other devices based on information it
automatically sends, such as IP address or browser type.

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STRICTLY NECESSARY COOKIES

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These cookies are necessary for the website to function and cannot be switched
off in our systems. You can set your browser to block or alert you about these
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