Income Inequality in the Greed-Sector of Crony Capitalism
Over at MT Cowgirl, Lynn offers a link about how some awful nonprofits compensate their CEO over a million dollars, and because of that outrageous compensation, the state of New York may try to place limits on compensation:
More than 20 nonprofit groups, from New York Presbyterian Hospital and the Boys & Girls Clubs of America to Lincoln Center for the Performing Arts, paid top executives more than $1 million a year in 2010 and 2011, the Chronicle of Philanthropy found.
The tally, an increase from 15 such pay packages in the previous study, showed chief executive officers or other leaders at 23 nonprofit charities and foundations had taxable compensation exceeding $1 million, the Chronicle said in a study to be released today.
“By far the most comments we get have to do with CEO salaries and a general outrage and shock at some of the salaries that they see,” said Ken Berger, president of the nonprofit watchdog group Charity Navigator. “There are even donors shocked at the notion of a six-figure salary.”
As protest movements such as Occupy Wall Street have brought more focus on the richest 1 percent of Americans, high pay for nonprofit executives has prompted New York and other states to suggest limits on compensation. Nonprofit watchers such as Berger say it may also prompt additional U.S. oversight or public policy changes for the $2.5 trillion industry.
“To assume that you’re going to become a millionaire or a multimillionaire, running a public charity that’s supposed to provide a public benefit, is just absurd as far as we’re concerned,” Berger said.
Yes, let’s address excessive compensation of top-paid positions within organizations, but why stop with non-profits?
For a crazy data point, the Economic Policy Institute shows how worker vs. CEO pay has increased since 1978, and the comparison is astonishing.
Increase in WORKER annual compensation from 1978-2011: 5.7%
Increase in CEO annual compensation from 1978-2011: 726.7%
Last year a report showed how S&P 500 CEOs made 354 times more than their average worker:
The ratio of CEO-to-worker pay at companies in the S&P 500 was 354-to-1 last year, according to the AFL-CIO, the umbrella organization for many of America’s unions. That’s up from 281-to-1 in 2002 and 42-to-1 in 1982, the organization found.
This news probably comes as little surprise to regular readers of HuffPost Business. We’ve highlighted other reports in the past indicating that the ratio between worker and CEO pay is pretty out of whack at many American companies. For example, Walmart’s CEO earns 1,034 times that of the company’s median worker, according to a March analysis from PayScale.
The same analysis found that the CEO-to-worker pay ratio at Target was 597-to-1, and that the ratio at Walt Disney was 557-to-1. Other studies have found that CEO pay is growing at three times the rate of everybody else’s, and that CEO pay grew 127 times faster than worker pay over the past 30 years.
Income inequality has grown obscene over the past 4 decades. Whatever corruption exists within the nonprofit sector pales in comparison to the trends in the greed-sector of exploitive, for-profit crony capitalism.