The next time you go to the movies, remember the Norman conquest of Britain in 1066.
That’s when William the Conqueror crossed the English Channel from Normandy and defeated the last Anglo-Saxon king, changing the course of world history. Back then, the feudal system was in full swing, with medieval peasants toiling while lords and ladies lived in sumptuous luxury. It was a time, in some ways, not unlike our own.
A recent report that I co-wrote for the Institute for Policy Studies found 50 publicly traded U.S. corporations that paid their CEOs more than 1,000 times what they paid their median workers in 2018.
Need some perspective for that? Try this: If some lord in 1066 had collected 1,000 times the earnings of his peasants, those poor unfortunates would still be working today — 953 years later — to make as much as their lord pocketed in a single year.
The folks who take your ticket at the movies could relate to that.
Adam Aron, CEO of the AMC Entertainment movie theater chain, last year took home nearly 1,013 times more than the typical AMC employee, our report found. Ticket takers and popcorn poppers at AMC would have to work more than an entire millennium to earn what Aron was paid in 2018 alone.
Some 49 major U.S. companies sported even wider divides. At the appropriately named Gap, for instance, CEO Art Peck walked off with 3,566 times as much as his typical worker.
No other nation lavishes this kind of compensation on corporate executives. In Japan, for instance, top executives average just one-tenth of what their U.S. counterparts enjoy.
And the more CEOs get, the more they want, and the more recklessly they behave to get it.
William the Conqueror pillaged and plundered vast territories to become one of the 20 wealthiest human beings in history. In modern times, bonus-chasing CEOs have followed suit. To fatten their own paychecks, they’ve boosted short-term stock values by any means necessary, from cooking the books to inflating the housing bubble to flooding poor communities with opioids.
We don’t have to tolerate this medieval-style reward system. Through public policy, we can encourage corporations to share the wealth that their employees create.
Portland, Oregon, took a precedent-setting step in that direction last year, when it began taxing corporations that pay their CEOs more than 100 times what they pay their median workers.
San Francisco voters will find a similar proposal on their March 2020 ballots, and legislators in seven states also are considering it. More recently, Sen. Bernie Sanders proposed a sweeping CEO-worker pay ratio tax for the federal level.
We can go even further. We can give companies with modest CEO-worker pay gaps a leg up in the procurement process that decides who gets government contracts. Federal contractors take in a half-trillion dollars a year in tax dollars, so this would be significant leverage.
Meanwhile, billions of taxpayer subsidies flow into corporate coffers. More than 1,000 local, state and federal corporate subsidy programs dot the American economic landscape, with the 50 largest subsidy deals adding up to $66.4 billion as of August. We should deny this taxpayer-funded generosity to companies with unconscionable pay gaps.
No one should have to labor a thousand years — or even a century — to make what their top bosses make in 12 months. By linking corporate tax rates, taxpayer subsidies, and government contracts to CEO-worker pay ratios, we could help make medieval pay practices something you only see in the movies.