Over 300 to 1 – that’s the ratio of CEO to average employee pay in the United States. The current system of executive pay distorts incentives, exacerbates income inequality, and leads consumers and employees to think the game is rigged against them. That’s why we created our new Executive Compensation initiative, pressing companies to better control and reduce unjustified CEO pay.
The Executive Compensation initiative is part of our new Power of the Proxy program, which focuses on offering shareholders the resources they need to vote their proxies and align their investments and values. A recent poll showed that only 18% of Americans think the pay of top corporate executives is appropriate. Yet for the most part, shareholder advisory votes give rubber-stamp approval to astronomical executive compensation packages. Our goal is to help shareholders, including mutual funds, pensions, foundation, endowments, and individuals create proactive change in a broken system.
We’ve already co-filed our first shareholder resolutions on Executive Compensation with Walgreens and with Apple.
As You Sow is also in the process of conducting a comprehensive analysis to shine a light on the 100 companies with the most problematic executive compensation practices in the S&P 500. We have analyzed over 30 criteria that represent red flags on compensation, in categories that focus on companies that perpetuate the upward spiral, issues related to sustainability, long-term performance, and others. The report will be released later this winter.