slides: The Highest Paid CEOs in Oregon

Tuesday, April 14, 2015

GoLocalPDX News Team

The average Chief Executive Officer made 91 times the average worker's salary in Oregon in 2013, according to a study, “Executive Paywatch: High Paid CEOs and the Low Wage Economy”, published by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).

According to the Bureau of Labor Statistics data for production and nonsupervisory workers, the average worker in Oregon made $39,464 a year in 2013, while the average CEO in Oregon, according to the AFL-CIO, was paid $3,587,770.

Nationally, the CEO to worker pay ratio in 2013 was 331 to 1, and the CEO to minimum wage worker ratio was 771 to 1.

“Runaway CEO pay is fueling economic inequality, a dangerous trend that undermines the goal of raising wages for all,” Anthony DeAngelo, press secretary for the AFL-CIO, told GoLocalPDX. “CEO pay has increased dramatically at the same time that worker pay has stagnated due to policy choices that favor the 1 percent over working people.”

Paul Guppy, Vice President for Research at the Washington Policy Center think tank disagrees. “CEO salary decisions are voluntary. They are set by the market, not by government rules. Presumably a CEO earns his or her salary by bringing at least equal economic value to the company. If not, then the CEO is overpaid and the company is wasting its money.”

SEE THE LIST OF THE HIGHEST PAID CEOs IN OREGON IN THE SLIDESHOW BELOW.

Nike’s President and CEO Mark G. Parker is the highest paid CEO in Oregon, according to the AFL-CIO report. His total compensation of $14,678,349 includes a base salary of $1,550,000, stock awards worth $3,500,024, options worth $2,451,174, “non-equity incentive plan compensation” worth $6,538,177, and “other” compensation worth $638,974. At that rate, Parker earns 417 times the average American worker’s pay, calculated by the Bureau of Labor Statistics at $35,239.

The next highest earning CEO in Oregon is Mark Donegan, the Chairman and CEO of the Precision Castparts Corporation His total compensation of $9,699,876 includes a base salary of $1,530,000, a bonus of $200,000, options worth $5,662,150, “non-equity incentive plan compensation” worth $2,066,571, and “other” compensation worth $241,155. At that rate, Parker earns 275 times the average American worker’s pay.

In 2013, CEOs of the Standard & Poor’s (S&P) 500 Index companies received, on average, $11.7 million in total compensation, according to the AFL-CIO.

“Today’s ratio of CEO-to-worker pay is simply unconscionable,” states the AFL-CIO report. “While CEO pay remains in the stratosphere, production and nonsupervisory workers took home only $35,239 on average in 2013, and a full-time worker making the federal minimum wage earned only $15,080.”

Guppy disagrees. “It’s not a matter of justification. It’s a matter of whether the supposedly brilliant CEO is worth what the company’s board and shareholders are paying. Investors and customers are always welcome to take their money elsewhere if they don’t agree with how much the CEO is paid. The important point is this economic decision is voluntary – people are free to throw their money away on companies that pay their CEO’s too much. It’s not a regulatory decision forced on people through politics.”

Minimum Wage

According to the AFL-CIO report, 49.6% of workers making at or below the minimum wage are age 25 or older. The federal minimum wage is $7.25 an hour, while the Rhode Island minimum wage is $9.00 an hour.

The AFL-CIO supports raising the federal minimum wage to $10.10 an hour.

“Raising the minimum wage is a critical and simple way to help repair the underlying weakness in our economy. It would boost consumer spending and increase the purchasing power of millions of low-wage workers, especially in states with the highest percentages of low-wage workers—many of which also have the highest rates of poverty,” says DeAngelo.

“In brief, the minimum wage is a price control placed on labor by the government,” Guppy counters. “I wouldn’t say it “hurts” business; it only forces business owners to adjust to new conditions imposed by the government. Business owners have several ways to adjust: raise prices, lay-off workers, reduce hours, use more automation, shift some operations or future growth to a jurisdiction with a more flexible wage law. Those who are really hurt are young workers and low-skill workers whose labor may not be worth the mandated minimum. A worker may be willing to work, and an employer willing to hire, but a third party, government, intervenes and says this voluntary agreement is illegal above a certain price point. The mandated labor price may not pencil out for the employer, and the job disappears. Alternatively, the agreement continues as a black market job, outside the law.”

Seattle Woes - A Warning?

Guppy also raises the issues that cities like Seattle are facing with sharp rises of the minimum wage (Seattle is transitioning to a $15 minimum wage). “It will hurt people in Seattle in many small and mostly-unseen ways. Owners of one restaurant (Ivar’s Salmon House) said they were ending tipping and raising menu prices some 20%. Another (Icon Grill) said it was cutting paid vacation to just one week a year. One prominent restaurant owner (Tom Douglas) first announced a 2% minimum wage charge, then changed it to raising menu prices instead. Seattle-based Cascade Designs said they were moving 100 jobs to Nevada.”

“A high minimum wage law has a mean side,” Guppy concludes. “It makes many good jobs that people may want illegal. Union activists act like no one gets hurt, but when a young person or a low-skilled worker can’t find a job their wage drops to zero. Boosting the minimum wage feels generous and makes political activists feel good about themselves, but there are people, mostly poor, unemployed and voiceless, who get shut out.”