1

Author: Sarah Anderson directs the Global Economy Project and co-edits Inequality.org at theInstitute for Policy Studies. She has co-authored the more than 20 previous IPS annual Executive
Excess reports and testiﬁed before the Senate Budget Committee on this issue in 2024, 2021, and2012.
Research and editorial assistance: Oshin Pandey and Sam Pizzigati.
Cover design: Sarah Gertler.
Acknowledgements: Thanks to IPS Associate Fellow Scott Klinger for expert comments on thisreport. We are also grateful for the CEO policy advocacy of the Americans for Financial Reform
Task Force on Executive Compensation and Take on Wall Street.

The Institute for Policy Studies (IPS-DC.org), a multi-issue research center, has been conducting pathbreaking research on executive compensation for nearly three decades.
The IPS Inequality.org website (Inequality.org) provides an online portal into all things related to theincome and wealth gaps that so divide us, in the United States and throughout the world. Sign up for
our weekly newsletter at: Inequality.org/subscribe.
Twitter and Facebook: @inequalityorg
Institute for Policy Studies
1301 Connecticut Ave. NW, Suite 600
Washington, DC 20036
202 234-9382
www.ips-dc.org, Twitter: @IPS_DC
Facebook: http://www.facebook.com/InstituteforPolicyStudies
Email: sarah@ips-dc.org© 2024 Institute for Policy Studies

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Contents
Key ﬁndings………………………………………………………..…………….…….………………………..….. 1
Introduction…………………………………………………………..…………….…….………………………… 3
The Low-Wage 100: CEO pay, median worker pay, and pay ratios ……….………………………………… 4
The Low-Wage 100: Stock buybacks vs long-term capital expenditure ……………..….........................….. 5
The 20 Largest Low-wage Employers: Stock buybacks vs employee retirement beneﬁts ………...…....... 9
Policy options …………………………………………………………………...………….……………….…....... 12
Methodology and sources…………….………………....…………….……………….…...…….………...……..14
Appendix 1: The 100 S&P 500 companies with the lowest median worker wages ..…..……………..…... 15
Appendix 2: Our annual menu of CEO pay reforms ……………………………..………..……….......…...... 183

Key findings
This 30th annual Executive Excess report takes an in-depth look at the 100 S&P 500 corporations with thelowest median worker pay — a group we’ve dubbed the “Low-Wage 100” — and ﬁnds that CEOs at thesecompanies are continuing to enrich themselves at the expense of both their workers and the long-term
eﬀectiveness of their ﬁrms.
We speciﬁcally compare and contrast — for each company in the Low-Wage 100 — last year’s CEO andmedian worker pay and the ratio between the two. We also compare, for the past ﬁve years, what thesecompanies have spent on buying back their own stock with what they have invested in capital
improvements and employee retirement plans. Our research highlights ﬁve telling pay patterns.
1. The average CEO-worker pay ratio at Low-Wage 100 firms narrowed from 603 to 1 in 2022 to 538
to 1 in 2023, but median pay levels remain extremely low
•

•
•

•

Workers at the bottom of the corporate ladder have been ﬁghting hard for rewards that more fairly
reﬂect the contributions of their labor. Their struggles since the pandemic have helped increase the
Low-Wage 100’s average median worker pay by 9 percent, from $31,672 in 2022 to $34,522 in 2023.
Average Low-Wage 100 CEO pay has dipped slightly, from $15.3 million in 2022 to $14.7 million
last year.
Ross Stores shows both the lowest median worker wage and the widest pay gap. In 2023, Ross CEO
Barbara Rentler hauled in $18.1 million, 2,100 times as much as the $8,618 pay that went to her
ﬁrm’s median compensated employee, a part-time store associate.
Nike CEO John Donahoe II last year enjoyed the Low-Wage 100’s single largest compensation
package. He raked in $32.8 million in 2023, 975 times as much as the athletic wear company’s$33,646 median pay.

2. From 2019 through 2023, the Low-Wage 100 spent $522 billion — over half a trillion dollars— on stock buybacks•••

Over the past ﬁve years, all but seven Low-Wage 100 ﬁrms “invested” in stock buybacks. Buybacks
artiﬁcially inﬂate executive stock-based pay and siphon corporate dollars out of worker wages andproductive long-term investments.
Lowe’s led the Low-Wage 100 share buyback charge. The company spent $42.6 billion on buying
back its own shares, a sum large enough to have given each of the ﬁrm’s 285,000 global employees
an annual $29,865 bonus for ﬁve years. In 2023, Lowe’s CEO Marvin Ellison enjoyed totalcompensation of $18.2 million. The retailer’s median annual worker pay: a mere $32,626.
Home Depot ranks second in our Executive Excess buyback rankings. The big box chain spent $37.2
billion on share repurchases between 2019 and 2023. That outlay would have been enough to give1

each of Home Depot’s 463,100 global employees ﬁve annual $16,071 bonuses. Home Depot medianpay stands at just $35,131.
3. From 2019 through 2023, nearly half of Low-Wage 100 companies — 47 in all — plowed more
corporate cash into buying back their own shares of stock than investing in capital
improvements
•

•

4.

The 20 largest U.S. employers in the Low-Wage 100 have spent — over the last five years —nine times as much on stock buybacks as on employee retirement plan contributions
•

•

•

5.

Even some technology ﬁrms within the Low-Wage 100 last year spent far more on buybacks thanon capital expenditures, such as equipment and tech upgrades. Johnson Controls, a producer of“smart building” technologies, has spent $8.8 billion more on buybacks than on CapEx over the
past ﬁve years. Semiconductor manufacturer Analog Devices has spent $6.2 billion more.
Lowe’s shows the largest buybacks-CapEx gap. The retailer spent $33.6 billion more repurchasing
shares than making capital expenditures from 2019 through 2023. This represents a stunningcorporate priority turnaround. Two decades earlier, from 2000 through 2004, the retailer spentnothing on stock buybacks.

Of these 20 leading low-wage employers, only Costco spent less on buybacks than on employee
retirement plan contributions — and not by much. Costco allocated $2.1 billion to buybacks during
this period and $2.4 billion to employee 401(k) plans.
AutoZone sports the largest buyback-retirement beneﬁts gap. From 2019 through 2023, the autoparts chain spent 92 times more on repurchasing its own shares than on employee retirement
security.
Chipotle ranks second on the buyback-retirement beneﬁts gap list, spending 48 times as much on
buybacks as on 401(k) plan contributions.

Runaway CEO pay continues to infuriate average Americans, and policymakers are beginning
to respond to that anger

Poll after poll continues to show widespread public outrage — across the political spectrum — overtoday’s extreme CEO-worker pay gaps. This growing anger is propelling both increased union organizing
and lawmaker interest in cracking down on excessive CEO pay packages. In this Executive Excess report, wehighlight three particularly promising areas of policy reform that are gaining legislative traction:•••

Taxing and restricting stock buybacks
Subjecting corporations with excessive levels of CEO pay to higher tax levies
Using federal contracts and subsidies to discourage wide corporate pay gaps

2

Introduction
At a time of intense political divisions, Americans across the political spectrum share enormous common
ground on at least one problem facing our nation: the extreme CEO-worker pay gaps at our country’s
largest corporations.
For many years now, poll after poll has shown widespread public outrage over these disparities. A June
2024 Bentley University-Gallup survey, for instance, found that 83 percent of Americans feel thatbusinesses should be avoiding large CEO-worker pay gaps. Some 96 percent of Democrats, 83 percent of
independents, and 67 percent of Republicans hold this view. Among all political groups, 55 percent see
avoiding such gaps as “extremely” important.
What gets ordinary Americans particularly angry? Watching major companies hand out massive CEO
paychecks while their lower-level employees are struggling to get by. This report focuses in on these big
pay-gap companies. The 100 S&P 500 corporations with the lowest median wages — the Low-Wage 100 —last year paid their CEOs an average 538 times what they paid their most typical workers. Average
Americans, notes a Harvard Business School study, believe that corporate CEO-worker pay ratios should
run no higher than 7 to 1.
CEO-worker pay gaps, as three decades of Executive Excess reports have detailed, undercut both economic
fairness and corporate eﬀectiveness. Extensive academic research has shown that extreme pay disparities
lower employee morale and productivity and raise turnover rates. Our Institute for Policy Studies
bibliography of such studies includes another Harvard Business School analysis that documents how
ﬁrms with overpaid CEOs and underpaid workers end up with both lower sales and signiﬁcantly higher
levels of employee dissatisfaction and turnover.
Extreme pay disparities also widen gender and racial disparities, since women and people of color makeup a disproportionately large share of low-wage workers and a tiny share of corporate leaders. As of June
2024, women held just 52 of Fortune 500 CEO positions while making up 68.9 percent of workers earning
the federal minimum wage. Black CEOs lead just eight — 1.6 percent — of Fortune 500 corporations.
Can Americans transcend our diﬀerences and come together to tackle these obscene pay divides? Our
Executive Excess report last year related how public outrage over corporate pay gaps is helping unions win
strong new contracts at enterprises ranging from Detroit’s Big 3 automakers to major hotel chains.
Employees at a Denver Live Nation concert venue have even cited our 2023 Executive Excess report as a
powerful motivator for their successful union drive.
Policymakers are also taking steps to address widespread concerns over corporate pay patterns. But much
more remains to be done. This year’s Executive Excess ends with a policy menu — the most comprehensive
available — for ensuring that Corporate America more equitably shares the fruits of everyone’s labor.
3

The Low-Wage 100

CEO pay, median worker pay, and pay ratios
For the second year in a row, this annual Executive Excess report zeroes in on the 100 S&P 500 companies
with the lowest median wages. All employees contribute to corporate proﬁts, but too many of ourcountry’s top-tier corporations are doing a spectacularly poor job of sharing the rewards.
Low-Wage 100 Average
CEO total compensation ($ million)

Median worker pay

CEO-worker pay ratio

2023

2022

2023

2022

2023

2022

$14.7

$15.3

$34,522$31,672

538

603

Source: Corporate proxy statements filed with the SEC. See Appendix 1 for details on the full Low-Wage 100.

In 2023, median worker pay at Low-Wage 100 companies averaged $34,522, up 9 percent from 2022.
Average CEO pay dipped from $15.3 million to $14.7 million, while the pay ratio narrowed from 603 to 1 to
538 to 1. These ﬁgures — all consistent with broader economic analyses — show that low-wage worker pay
has outpaced wage growth for higher-earning Americans over recent years. Hard-fought victories in statelevel campaigns to increase minimum wages, along with tight labor markets, have most deﬁnitely
translated into modest improvements for those workers at the bottom of our income ladder.
But pay levels at these leading publicly traded corporations remain woefully insuﬃcient to meet basic
budgets for millions of families. The Low-Wage 100 median pay levels in 2023 ranged from a low of $8,618
for Ross Stores part-time associates to $51,084 for typical workers at Kleenex maker Kimberly Clark.
The federal Securities and Exchange Commission requires ﬁrms to calculate median worker pay based on
their global workforces. Given this requirement, we might assume that the companies in the Low-Wage 100
with the lowest wage levels must have most of their employees working in developing countries. But thishappens deﬁnitely not to be the case.
Five companies that operate largely in the United States ― Ross Stores, Bath & Body Works, Ulta Beauty,
TJX, and Starbucks ― rank among the 10 large U.S. companies with the lowest wages. These retail and fast
food ﬁrms have chosen a business model that relies overwhelmingly on poorly paid part-time employees
who enjoy precious few beneﬁts.
The Low-Wage 100 average pay ratio of 538 to 1 is far wider than the 268 to 1 average ratio for the S&P 500
as a whole. And it is completely oﬀ the charts compared to pay gap levels of times past. The average ratio
among large U.S. corporations stood at just 25 to 1 in 1965.

4

The Low-Wage 100

Stock buybacks vs long-term capital expenditureOver the past ﬁve years, the Low-Wage 100 have spent a combined total of more than $522 billion
repurchasing their own stock. All but seven ﬁrms in this group have engaged in stock buybacks, a onceillegal ﬁnancial maneuver that allows corporate executives to create huge short-term windfalls forthemselves and shareholders at the expense of workers and long-term productive investments. Stockbuybacks artiﬁcially boost the value of a company’s shares and, in the process, pump up the value of thestock-based compensation that makes up about 80 percent of corporate CEO compensation.
Buybacks also make it considerably easier for executives to hit bonus targets tied to share values. CEOs
regularly time the sale of their personal stock holdings to cash in on the stock price surge that typicallyfollows a buyback announcement. An SEC investigation has found that top executives sell ﬁve times asmuch stock in the eight days after a buyback announcement as they sell in the days before theannouncement.
The Low-Wage 100 Corporations That Spent the Most on Stock Buybacks
Stock buyback
expenditures, 20192023 ($million)

Total global
employees, 2023

Average buyback
expenditure per employee
per year, 2019-2023

Median worker
pay, 2023

Lowe’s$42,558

285,000$29,865$32,626

Home Depot$37,212463,100$16,071$35,131

Walmart$30,828

2,100,000$2,936$27,642

Sources: Corporate proxy statements and 10-K and 10-Q reports. See Appendix 1 for details on the full Low-Wage 100.

Company snapshots
Lowe’sThis home improvement chain leads the Low-Wage 100 in buyback spending and the buyback-CapEx gap
and also ranks third in the buyback-retirement benefit gap
Lowe’s, the low-wage buyback leader, has spent $42.6 billion repurchasing its own stock over the past ﬁve
years. Those billions, if divided among the home improvement chain’s 285,000 global employees, would
have been enough to ensure every Lowe’s worker an annual $29,865 bonus for ﬁve straight years. In 2023,
Lowe’s CEO Marvin Ellison enjoyed annual compensation of $18.2 million. The retailer’s median annual
worker pay last year: a mere $32,626.
Lowe’s astronomical buyback spending, as we detail below, has left the company with the largest LowWage 100 gap between buybacks and long-term capital investments. The retailer has spent $33.6 billion
5more repurchasing shares than on capital expenditures. Within the Low-Wage 100, Lowe’s also ranks thirdstingiest on the yardstick that contrasts buyback spending levels with contributions to employee 401(k)plans.
Lowe’s priorities have changed dramatically in the past two decades. Back in the 2000-2004 period, Lowe’s
spent zero on buybacks while allocating signiﬁcantly more to CapEx than the company did from 2019 to2023. The ﬁrm spent $10.8 billion on capital investments between 2000 and 2004, more than it spent overthe past ﬁve years, even without adjusting for inﬂation.
Employees working to unionize Lowe’s have pointed to the company’s massive buyback spending as asign of the retailer’s skewed priorities. The company is currently facing unfair labor practice charges
related to everything from inappropriately surveilling workers to retaliating against organizers of a union
drive in New Orleans.

Home Depot

A buyback tsunami has this retailer’s top executives facing a determined union organizing effort
Lowe’s top competitor has blown $37.2 billion on buybacks over the past ﬁve years, enough to have given
all 463,100 Home Depot employees a $16,071 bonus every one of those years. The company chose insteadto manipulate its share price with buybacks and create windfalls for its executives and wealthiest
shareholders. CEO Edward Decker pocketed $14.4 million in 2023, 410 times the Home Depot 2023 median
pay of $35,131.
The ongoing campaign to unionize Home Depot has decried the ﬁrm’s buyback spending. Like Lowe’s,Home Depot has acted aggressively to thwart organizing eﬀorts. Earlier this year, the NLRB dinged thecompany for making an employee remove the acronym “BLM” — Black Lives Matter — from his work
apron. Since 2000, notes Good Jobs First, the company has paid more than $300 million in penalties forassorted employment, safety, and environmental oﬀenses.

Walmart

Shortchanging employees has the CEO of this corporate giant taking in nearly a thousand times the pay of
his firm’s most typical workers.
The country’s largest employer has spent $30.8 billion repurchasing company stock over the past ﬁve
years, enough to have advanced each of Walmart’s 2.1 million global employees, over those same years, anannual $3,936 bonus.
Half of this giant retailer’s workers made less than $27,642 in 2023. CEO Doug McMillon, meanwhile, tookin 976 times as much, or $26.9 million. Walmart has also spent over the past ﬁve years nearly ﬁve times
more on buybacks than on contributions to employee 401(k) plans.

6Buybacks Siphon Resources from Long-term Investment
Every dollar spent on buybacks represents a dollar not spent on investments vital to long-term value
creation, investments that can range from strengthening innovation through better employee training toacquiring and upgrading technologies, equipment, and properties — the capital expenditures widely
known as CapEx.
At 47 Low-Wage 100 companies, outlays for stock buybacks exceeded capital expenditures between 2019 and2023. If we exclude CapEx juggernaut Amazon from our calculating, the Low-Wage 100 as a whole havespent nearly as much on buybacks as on capital expenditures over the past ﬁve years.
The Low-Wage 100 Stock Buyback-CapEx Gap
Stock buyback
expenditures, 2019-2023($million)

Capital expenditures,2019-2023 ($million)

Share of Low-Wage 100
that spent more on
buybacks than on
CaPex

Low-Wage 100 total$522,285$751,791

47%

Low-Wage 100 without Amazon$516,285$517,363

Sources: Corporate proxy statements and 10-K and 10-Q reports. See Appendix 1 for details on the full Low-Wage 100.

Company snapshots
As noted above, buyback leader Lowe’s has sported the largest gap between share repurchases and capital
expenditures. More surprisingly, the top 10 corporations in this category include two enterprises that claim
to be on the technological cutting edge.

Johnson Controls

This major federal contractor has a buybacks-CapEx gap of a whopping $8.8 billion
Johnson Controls has the eighth largest Low-Wage 100 gap between stock buybacks and CapEx outlays.
The company spent $8.8 billion more repurchasing stock than on long-term investments from 2019 through2023.
Johnson Controls likes to boast about making large buildings “smart” through their automating systems
for HVAC, security, and ﬁre safety, and the company has received more than $1 billion in federal contracts
over recent years to service U.S. government buildings. But a cybercrime gang last year exposed theweaknesses in the Johnson Controls information technology infrastructure. That gang turned out to be able
to steal sensitive data and deploy ransomware that disrupted Johnson Controls operations and sent thecompany’s share price tumbling. The Department of Homeland Security would go on to express concernthat the cyberattack had exposed conﬁdential government information.
7

Johnson Controls spent massively on stock buybacks over the 2019-2023 years and, at the same time,shrank its U.S. workforce from 39,000 to 37,000. Sixty-three percent of the company’s employees — and its
headquarters — sit outside the United States. Founded in Milwaukee in 1885, Johnson Controls moved its
legal home to Ireland in 2016 to lower its U.S. tax bill.
Global median pay at Johnson Controls stands at $49,465, and the company is advertising for U.S.
technicians starting at $20 per hour. By contrast, CEO George Oliver made $15.9 million last year, 321 times
the ﬁrm’s median pay.

Analog Devices

This semiconductor producer seeking federal CHIPS subsidies has spent three times as much on stockbuybacks as on capital investments over the past five years.
Analog Devices ranks tenth within the Low-Wage 100 on the size of the gap between stock buybacks andcapital expenditures. Over the 2019-2023 period, this semiconductor producer spent $6.2 billion more on
stock buybacks than on long-term investments.
Analog Devices CEO Vincent Roche pulled down $25.5 million last year, 527 times as much as Analog
median pay of $48,425, the lowest median pay level of any large U.S. semiconductor manufacturer.
A group of Analog Devices employees recently delivered a petition to top executives demanding that thecompany do more to ensure workers a fair share of the rewards the ﬁrm is making oﬀ of the government
subsidies the ﬁrm is receiving to boost domestic computer chip production. The company has alreadyreceived ﬁnancial support from the state of Oregon to expand a factory in that state and is reportedly
seeking federal CHIPS subsidies as well.
The petitioning workers point out that they have been suﬀering unpaid shutdowns and delays ofscheduled raises at the same time the company has continued to reward executives and shareholders withbillions in stock buyback spending. Among the key worker demands: a $27 minimum hourly wage, no
unpaid shutdowns or forced vacations, and improved training for handling dangerous chemicals.
The Biden-Harris administration has announced it will be giving preferential treatment in the awarding of
CHIPS grants to companies that agree to forego buybacks for ﬁve years. Analog Devices has not publicly
committed to taking this step. The company still has more than $2 billion remaining in its boardauthorized share repurchase program.

8

The 20 Largest Low-wage Employers
Stock buybacks vs employee retirement benefits

Generous retirement beneﬁts have long been a key business tool for retaining employees and helping themfocus on their jobs rather than having to worry about their future. To get a deeper understanding of thepriorities of the Low-Wage 100, we zeroed in on the 20 companies on this list with the largest number of
U.S.-based employees and compared their corporate stock buyback spending with their contributions toemployee retirement plans.
We found that these 20 leading low-wage ﬁrms spent nine times more on stock buybacks, from 2019
through 2023, than on employee retirement plan contributions. Only Costco spent less — and not by much.
The giant retailer allocated $2.1 billion to buybacks and $2.4 billion to employee 401(k) plans during thisperiod, as we detail in a table below.
This siphoning oﬀ of company resources away from worker retirement plans to stock buybacks continues adecades-long trend that has seen corporations largely abandon traditional pensions. Companies haveinstead shifted pension ﬁnancial risk from employers onto employees via 401(k)-type plans that leave howmuch employees get to collect in retirement up to how much they themselves contribute, the whims ofﬁnancial markets, and the size of often hidden administrative costs and fees.
Few companies in the Low-Wage 100 today oﬀer traditional pensions to any of their employees. Many domatch a portion of employee 401(k) contributions, but this matching oﬀers no beneﬁt to low-wage workers
who cannot aﬀord to set aside into pension accounts any of their income, as we documented last year in an
in-depth report on CEO versus worker retirement security.

Company snapshots
AutoZone

The ant-union car parts chain spends more on stock buybacks than retirement benefits and capital
investment
AutoZone has the largest buybacks-retirement beneﬁts gap among the 20 largest employers in the LowWage 100. The auto parts chain spent 92 times more repurchasing its own stock than on employee
retirement security from 2019 through 2023. CEO William Rhodes pocketed compensation worth $18.8
million in 2023 — 705 times as much as the ﬁrm’s median pay of $26,669. AutoZone’s stock buyback
outlays of $14.4 billion over the past years exceeded their capital expenditures by more than $11 billion.
Workers have shared images from AutoZone’s orientation videos touting the ﬁrm’s “non-union
philosophy.”9

The 20 Largest Low-Wage Employers:
Spending on Buybacks vs Employee Retirement Plans
US employees*

Stock buybacks,
2019-2023($million)

Walmart1,600,000$30,828

Employercontributions
to employee
retirement plans,
2018-2022 ($million)$6,540

Amazon1,000,000$6,000$2,1352.8

FedEx

215,000$5,231$4,2701.2

Home Depot

411,200$37,212$1,12733.0

Target440,000$12,492$1,351

9.2

Kroger414,000$4,491$1,243

3.6

Starbucks

228,000$16,918

$638

26.5

Marriott International

117,000$8,929

$620

14.4

TJX

329,000$8,669$200

43.3

Walgreens Boots Alliance242,772$6,196$945

6.6

Lowe's281,000$42,558

$967

44.0

Costco Wholesale

208,000$2,054$2,4390.8

Dollar Tree

207,500$2,198$181

12.2

Darden Restaurants

183,000$2,113$188

11.3

Dollar General

170,000$8,964$318

28.2

Hilton Worldwide

159,000$5,762$214

26.9

Tyson Foods

120,000$1,582$508

3.1

AutoZone

103,500$14,374

$156

91.9

Chipotle Mexican Grill

114,042$2,133$45

47.7

Ross Stores

101,000$4,219

$105

40.3

Total

6,644,014$222,923$24,190

9.2

Company, ranked
by number of employees

Buybacks-Benefits
ratio
4.7

*Employee figures in bold/italics reflect global workforce because the company did not report a breakdown of U.S. versus non-U.S.
employees. Sources: Retirement plans: Form 5500 reports filed with the U.S. Department of Labor. Buybacks: Wall Street Journal
financial data and 10-K reports. U.S. employees: 10-K reports, proxy statements, and media reports. Note: Retirement plan
contribution data in this report cover U.S.-based employees only while median worker pay data reflect corporate global workforces.

Chipotle

CEO known for shortchanging workers and artificially boosting share prices lands a new job as chief of theworld’s largest coffeehouse chain
Chipotle ranks second-stingiest after AutoZone, spending 48 times more on buybacks than on employee
401(k) plan contributions over the past ﬁve years. As of 2022, fully 92 percent of eligible participants in the
Chipotle 401(k) plan had zero balances, according to the Beneﬁts Pro Free Erisa database. During his six
years at the helm of the Mexican fast food chain, Brian Niccol has often ranked among the top-paid U.S.
10

CEOs. Last year his total compensation came to $22.5 million — 1,354 times as much as the ﬁrm’s median
pay of $16,595. On August 31, Niccol will assume the top job at Starbucks.

Starbucks

Pressure is building on the coffee chain to assume more responsibility for ensuring workers a decent
retirement
Starbucks has spent 26 times as much on stock buybacks over the past ﬁve years as on contributions to theﬁrm’s 401(k) plan. The company currently matches the ﬁrst 5 percent of the pay an employee contributes.
But Starbucks employees — like many low-wage workers — have a hard time setting aside any money for
their future. Their median pay runs just $14,209. As of 2022, 53 percent of eligible participants in the
Starbucks 401(k) plan had zero balances, according to the Beneﬁts Pro Free Erisa database.
Starbucks workers have organized unions at some 437 stores since 2021. These workers have raised
retirement beneﬁts among their demands on the giant coﬀee chain. Starbucks Workers United wants thecompany to automatically enroll employees in the ﬁrm’s 401(k) plan and put adequate funds into thoseplans, with additional employee contributions as optional. Employers, the union notes, “have a
responsibility to assist employees in preparing for retirement, in recognition of their years of labor.”
Starbucks has not yet signed a collective bargaining agreement with employees, but, after years of antiunion tactics, the company has at least been negotiating with the workers’ union for the past several
months. After Starbucks replaced CEO Laxman Narasimhan with Chipotle chief Brian Niccol on August 13,
the outcome of these negotiations is even less certain. The Mexican food chain has a history of anti-union
activities. Last year Chipotle’s pay gap, at 1,354 to 1, was even larger than the 1,028 to 1 gap at Starbucks.

Dollar GeneralMore workers who simply cannot afford to invest in their retirement futures
Dollar General has spent nearly $9 billion on buybacks over the past ﬁve years, 28 times as much as thecompany contributed to employee retirement plans. The discount retailer does oﬀer a 401(k) with 5 percent
matching after the ﬁrst year of service. But 88 percent of eligible participants in the Dollar General 401(k)plan have zero balances, according to the Beneﬁts Pro Free Erisa database. That certainly rates as no
surprise: Median Dollar General worker pay stands at just $18,657. Dollar General CEO Todd Vasos, for hispart, made $9.7 million last year, 521 times the ﬁrm’s median pay.
Dollar General has repeatedly faced huge penalties for serious workplace safety violations. Most recently,
this past July, the company agreed to pay $12 million in penalties and improve safety at its stores after the
Labor Department found numerous violations, including blocked exits and a lack of access to ﬁreextinguishers.

11Policy options
We highlight here three particularly promising areas of CEO pay policy reforms. Appendix 2 catalogs amuch more extensive menu of options.

Taxing and restricting stock buybacks
The 2022 Inﬂation Reduction Act introduced a 1 percent excise tax on the repurchase of corporate stock.
The 2024 Democratic Party Platform proposes quadrupling this excise tax, and a pending Senate bill, theStock Buyback Accountability Act (S. 413), would meet this goal. The Reward Work Act (HR 3694) would
institute a general ban on stock buybacks in the open market, a move that would largely return us to thepre-1982 status quo.
Biden has also included a proposal in his federal budget that would ban top executives from selling theirpersonal stock for a multi-year period after a buyback, preventing CEOs from timing share repurchases tocash in personally on a short-term price pop they themselves have artiﬁcially created. A Senate bill, the
ALIGN Act (S. 790), would ban executives from selling their shares within a year of a stock buyback
announcement.
In 2023, the SEC issued a new regulation requiring companies to provide more detail about their buyback
activity, including whether top executives bought or sold company shares during the four days before orafter a buyback announcement. But the Fifth Circuit Court of Appeals then struck down the rule after the
U.S. Chamber of Commerce ﬁled suit against it.
A bipartisan letter by Senators Tammy Baldwin and Marco Rubio calls on the SEC to re-propose the rule,
as does a coalition letter that includes various labor unions as signatories.

Subjecting corporations with excessive levels of CEO pay to higher tax levies
Higher tax rates on companies with wide CEO-worker pay gaps would create an incentive to both rein in
executive pay and raise worker wages, all the while generating signiﬁcant new capital for vital public
investments. Laws that share those goals are already generating revenue in two major cities, San Francisco
and Portland, Oregon. Several related bills are also pending at the federal level, including:
The Curtailing Executive Overcompensation (CEO) Act (S. 3176/H.R. 6191), legislation that applies an
excise tax to publicly traded and private companies that have above a 50:1 CEO-to-median-worker pay
disparity. Under this excise tax formula, the tax owed would be proportional to the degree a company’s
pay ratio exceeds 50:1 and to the level of the CEO’s compensation. In other words, companies with a large
pay gap would owe extra taxes — and if they also have extremely high CEO pay, they would owe even12

more. Revenue estimate: This bill, had it been in eﬀect in 2022, would have raised more than $10 billion
from the Fortune 100 largest U.S. companies alone.
The Tax Excessive CEO Pay Act (S. 794/H.R.1979), a pending bill that ties a company’s federal corporate
tax rate to the size of the gap between its CEO and median worker pay. Tax penalties would begin at 0.5
percentage points for companies that pay their top executives between 50 and 100 times more than their
median workers. The highest penalty would apply to companies that pay top executives over 500 times
worker pay. Revenue estimate: $150 billion over 10 years. The CEO Accountability and Responsibility Act(H.R. 1284) imposes similar tax penalties for large ratios.
A May 2024 survey suggests that such taxes would be enormously popular. Overall, 80 percent of likely
voters favored a tax hike on corporations that pay their CEO at least 50 times more than they pay their
median employee. Large majorities in every political group supported the idea (89 percent of Democrats,
77 percent of Independents, and 71 percent of Republicans). In swing states, 83 percent of likely votersgave the proposal a thumbs up.

Using federal contracts and subsidies to discourage wide corporate pay gaps
President Biden has ﬂexed his executive powers in numerous ways to help working families. The Biden
administration has, for instance, lifted the wage ﬂoor for certain federal contract workers to $15 per hour.
And the administration has ordered large construction ﬁrms involved in public infrastructure projects tonegotiate collective agreements with their workers. The Biden administration is starting to use thesepowers to crack down on buybacks as well.
The bipartisan CHIPS and Science Act forbids semiconductor subsidy recipients from spending CHIPS
funds on stock buybacks. The Department of Commerce has also promised to provide preferential
treatment in the awarding of grants to ﬁrms that commit to refrain from all stock buybacks for ﬁve years.
Some Democratic Party lawmakers have urged the Biden-Harris administration to go further to prevent
CHIPS funds from enabling stock buybacks. As Senator Elizabeth Warren, Representative Pramila Jayapal,
and other members of Congress pointed out in a recent letter to Commerce Secretary Raimondo, theagency’s guidance for grant applicants continues to “leave the door open for semiconductor companies totake millions or even billions in CHIPS grants, move some money around, and then engage in more stockbuybacks.”
To maximize the beneﬁts of this program, the Biden administration should take advantage of its statutory
authority to fully ban CHIPS grant recipients from engaging in stock buybacks. A recent report we haveco-published with Americans for Financial Reform oﬀers more on this opportunity to use the $39 billion in
CHIPS subsidies to reduce the level of share buybacks.

13

The administration could also do much more to leverage the power of the public purse against extreme
pay disparities. The Patriotic Corporations Act could serve as a model. This bill would grant preferential
treatment in contracting to ﬁrms with CEO-worker pay ratios of 100 to 1 or less, among other benchmarks,
including neutrality in union organizing. The Congressional Progressive Caucus has called on President
Biden to introduce such incentives.
By encouraging big companies to narrow their pay gaps, the administration would also help ensure that
taxpayers get the biggest bang for the buck for federal contract dollars. Studies have shown thatcompanies with narrow gaps in CEO-worker compensation tend to perform at higher levels than ﬁrms
with wide gaps.

Methodology and Sources
S&P 500 corporations with the lowest median worker pay: Data reported by companies in annual
corporate proxy statements, drawn from the AFL-CIO Paywatch database.
CEO compensation, median worker pay, and pay ratio calculations: The 2010 Dodd-Frank Wall Street
Reform and Consumer Protection Act requires large U.S. publicly traded corporations to report the ratio
between their CEO and median worker pay to the SEC on a yearly basis. Under the SEC rule, companies
key their ratios to two numbers:•

CEO compensation: includes salary, bonuses, the grant date estimated value of stock and stock
option awards, changes in pension value, and perks.

•

Median employee compensation: based on a ﬁrm’s global workforce, including part-time,
temporary, and full-time employees, but not subcontracted workers. Companies can exempt nonU.S. employees from their ratio calculations only if these employees make up 5 percent or less of thetotal workforce. They cannot convert part-time and temporary employees into full-time equivalents.

Stock buybacks and capital expenditures: Annual 10-K reports and WSJ Markets data.
Except where otherwise noted, yearly ﬁgures in this report were not adjusted for inﬂation.

14

Appendix 1: The 100 S&P 500 companies with thelowest median worker wages in 2023
Medianworkerpay, 2023

CEOworker
pay
ratio,
2023

Stock buyback
expenditures,2019-2023($million)

Capitalexpenditures,2019-2023($million)$17,756$3,024Company, ranked alphabetically

CEO in 2023

CEO totalcompensation,
2023 ($million)

Accenture

Julie Sweet$31,550,906$20,670

1,526

Align Technology

Joseph Hogan$28,952,411$22,781

1,271$1,842$1,176

AmazonAndrew Jassy$1,357,764$36,27437$6,000$234,428

Amphenol

R.A. Norwitt$10,944,707$16,944646$3,221$1,689Analog Devices

Vincent Roche$25,543,635$48,425527$9,003$2,756

Aptiv

Kevin Clark$18,000,136$11,647

1,545

$875

$3,726

AutoZone

William Rhodes$18,796,822$26,669705$14,374$3,045

Avery Dennison

Deon Stander$6,070,962$15,679403$1,041$1,332Bath & Body Works

Gina Boswell$11,694,513$9,834

1,189$3,424$1,582

Baxter International

José Almeida$13,786,671$48,566284$2,402$3,460Becton Dickinson & Co.

Thomas Polen$17,309,938$42,404408$2,250$4,808

Best Buy

Corie Barry$14,443,881$32,656442$6,171$3,918

Borgwarner

Frédéric Lissalde$19,308,195$39,380490$733$3,064

Caesars Entertainment

Thomas Reeg

$18,610,359$33,250560$0$3,459Carnival

Josh Weinstein$13,808,603$16,789822$910$20,880

Chipotle Mexican Grill

Brian Niccol$22,473,427$16,595

1,354$2,133$2,189

Coca Cola

James Quincey$24,742,908$13,752

1,799$5,039$7,934

Cognizant Technology
Solutions

Ravi Kumar Current$22,563,405$40,660556$7,125$1,718Colgate Palmolive

Noel Wallace$17,121,584$50,885336$6,434$2,713

Constellation Brands

William Newlands$16,068,340$34,821461$3,645$4,540

Cooper Companies

Albert White$13,490,923$39,543341$307$1,451

CopartJeffrey Liaw

$2,009,000$45,22444$365$2,283

Corning

Wendell Weeks$15,627,653$42,240370$3,061$7,995

CorpayRonald F. Clarke$2,669,024$50,798

53$4,993$570

Costco Wholesale

Craig Jelinek$16,870,623$50,202336$2,054$17,610Darden Restaurants

Ricardo Cardenas$8,500,029$22,248382$2,113$2,230Dollar General

Todd Vasos$9,727,656$18,657521$8,964$6,144

Dollar Tree

Richard Dreiling$3,360,766$15,955

211$2,198$6,321

Domino’s Pizza

Russell Weiner$10,135,862$31,481322$2,887$471

Eaton Corp

Craig Arnold$20,493,989$50,683405$3,045$2,906

EcolabChristophe Beck

$15,547,055$49,177316$1,139$3,351

Emerson Electric

Lal Karsanbhai$18,317,194$47,840383$1,945$2,375

Epam Systems

Arkadiy Dobkin$7,545,130$39,153

193

$165

$390

Estee Lauder Companies

Fabrizio Freda$21,811,244$33,819645$5,761$6,333Extra Space Storage

Joseph Margolis$12,280,701$49,954

246

$141

$220

15

Medianworkerpay, 2023

CEOworker
pay
ratio,
2023

Stock buyback
expenditures,2019-2023($million)

Capitalexpenditures,2019-2023($million)$21,301

322

$880

$310

Company, ranked alphabetically

CEO in 2023

CEO totalcompensation,
2023 ($million)

Factset Research Systems

Philip Snow

$6,862,015

Fastenal

Daniel Florness$3,115,507$46,393

67

$290

$918

Fedex

Rajesh Subramaniam$13,249,823$45,976289$5,231$30,179

Fidelity National Information
Services

Stephanie L. Ferris$19,435,522$43,839443$5,139$1,193First Solar

Mark Widmar$7,725,497$23,560

328$0$3,917

Garmin Ltd

Clifton Pemble$6,540,666$41,063159$429$1,058Genuine Parts

Paul Donahue$11,398,274$38,903

293$988$1,551

Hershey

Ms. Buck$15,654,209$43,527360$1,850$2,546

Hilton Worldwide Holdings

Christopher Nassetta$26,556,464$48,435

549$5,762$725

Home Depot

Edward Decker$14,419,252$35,131410$37,212$14,052

Hubbell

Gerben Bakker$9,666,284$49,030

197

$400

$562

Iron Mountain

William Meaney$14,867,140$40,174371$0$4,415

Jabil

Kenneth Wilson$10,237,971$8,804

1,163$2,176$5,562

Johnson Controls International

George Oliver$15,882,646$49,465

321$11,560$2,712

Kimberly Clark

Michael Hsu$16,528,052$51,084324$2,225$5,075

KrogerRodney McMullen$15,710,572$31,302502$4,491$15,589

Las Vegas Sands

Robert Goldstein$21,937,818$41,185533$1,259$5,372

Linde

Sanjiv Lamba$19,200,255$49,230390$24,700$17,668

Live Nation Entertainment

Michael Rapino$23,438,317$28,207831$0$1,577

LKQ

Dominick Zarcone$12,189,021$41,841291$2,364$1,312Lowe’sMarvin Ellison$18,162,272$32,626557$42,558$8,921

Lululemon Athletica

Calvin McDonald$16,494,777$19,518845$2,053$2,198Marriott International

Anthony Capuano$22,664,045$44,805506$8,929$1,755

McCormick & CO

Brendan Foley$5,213,172$40,141275$226$1,203

McDonald’s

Christopher
Kempczinski$19,155,001$15,802

1,212$13,680$10,331

Mettler Toledo International

Patrick Kaltenbach$8,417,336$46,144

182$4,550$523

MGM Resorts International

William Hornbuckle$17,003,794$45,502374$8,207$3,198Mid America Apartment
Communities

Eric Bolton$8,015,765$45,501176$0$1,647

Mohawk Industries

Jeffrey Lorberbaum$4,428,417$42,888103$1,497$2,841

Mondelez International

Van de Put Dirk

$21,018,175$33,093635$8,544$4,771Monolithic Power Systems

Michael Hsing$14,643,469$49,493

296

$4

$364

MosaicJames O RourkeJoc$11,881,204$33,404356$2,982$6,381

Nike

John Donahoe II$32,789,885$33,646975$17,455$4,627

Norwegian Cruise Line

Harry Sommer$8,864,592$23,330380$451$7,871O’Reilly Automotive

Greg Johnson$5,603,352$35,086

160$12,429$3,106

Otis Worldwide

Judy Marks$15,924,194$49,048

325$2,375$737

PPG Industries

T. M. Knavish$12,472,955$49,519252$811$2,155

Public Storage

Joseph Russell$8,776,291$31,827276$3,445$1,54816

Medianworkerpay, 2023

CEOworker
pay
ratio,
2023

Stock buyback
expenditures,2019-2023($million)

Capitalexpenditures,2019-2023($million)464$2,216$962

Company, ranked alphabetically

CEO in 2023

CEO totalcompensation,
2023 ($million)

Ralph Lauren

Patrice Louvet$14,471,356$31,187

Robert Half

Keith Waddell$8,126,837$40,128203$1,299$236

Ross Stores

Barbara Rentler$18,094,944$8,6182,100$4,219$2,935

Royal Caribbean Cruises

Jason Liberty$17,216,276$18,073953$100$13,827

S&P Global

Douglas Peterson$19,506,412$43,834445$17,709$458

Seagate Technology Holdings

William Mosley$11,436,208$12,065948$6,067$2,382

Sherwin Williams

John G. Morikis$19,281,779$49,745388$8,292$2,538

Skyworks Solutions

Liam Griffin$17,261,436$32,457532$2,798$2,220Smith A. O. Corp.

Kevin Wheeler$8,756,656$49,422177$1,421$199

Starbucks

Laxman Narasimhan$14,604,531$14,209

1,028$16,918$8,936

Tapestry

Joanne Crevoiserat$14,489,503$29,535491$2,704$873

TargetBrian Cornell$19,203,353$26,696719$12,492$19,554

TE Connectivity

Terrence R. Curtin$16,717,748$28,447588$4,802$3,499Teleflex

Liam Kelly$9,039,947$37,432

242

$0

$436

Tesla

Elon Musk

TJX Companies

Ernie Herrman

Tractor Supply Co
Tyson Foods$0$45,8110$0$28,764$22,222,769$14,857

1,496$8,669$6,015Harry Lawton$11,374,666$22,152513$3,050$2,666

Donnie King

$13,180,119$41,949314$1,582$7,493Ulta Beauty

David Kimbell$12,663,880$13,193960$4,272$1,370

Universal Health Services

Marc Miller$14,407,937$50,152287$3,579$3,723ViatrisScott Smith$15,930,409$36,903469$250$2,514WabtecRafael Santana$15,493,240$48,924317$1,389$786

Walgreens Boots Alliance

Rosalind Brewer$14,134,190$34,763407$6,196$8,306

WalmartDoug McMillon$26,968,924$27,642976$30,828$71,538

Western DigitalDavid Goeckeler$11,031,692$11,519958$563$4,612

Willis Towers Watson

Carl Hess$12,668,832$49,706255$6,307$1,238

Yum! Brands

David Gibbs$21,238,955$17,628

1,205$3,895$1,150$14,672,026$34,522538$5,223$7,518$522,285$751,791

AVERAGETOTAL$1,467,202,616

17

Appendix 2: Our annual menu of CEO pay reforms
Every year, this section of our annual Executive Excess report oﬀers the most comprehensive available menu
of policy options for reining in CEO pay. These options cover reforms in everything from corporate
governance to government contracts and subsidies. Members of Congress have introduced legislation thatspeaks to some of these options. Other reforms are pending before legislative bodies in U.S. cities andstates — and nations around the world.
How best to evaluate these CEO pay reforms? IPS has developed, as a guide, the following principles foreﬀective and equitable corporate compensation.

Principles for a Better CEO Pay System
1. Encourage narrower CEO-worker pay
gaps.
As CEOs focus on funneling corporate resources
to shareholders and themselves, workers are notgetting a fair deal for their labor. Extreme pay
gaps also endanger enterprise eﬀectiveness.
Management guru Peter Drucker believed thatpay ratios can run no higher than 25-to-1
without damaging company morale andproductivity. Researchers have documented thatenterprises operate more eﬀectively over thelong term when they tap into — and reward —the creative contributions of all employees.

reckless decisions that generate short-term
earnings at the expense of long-term health forthe corporation and the broader economy andenvironment. Public policies can encourage
more reasonable compensation levels without
micromanaging pay levels at individual ﬁrms.
4. Bolster accountability to shareholders
On paper, the corporate boards that determine
executive pay must answer to shareholders. In
actual practice, top executives typicallydominate corporate boards. Despite some
progress, boards should face stronger
requirements to justify to shareholders thecompensation they award to executives.

2. Eliminate taxpayer subsidies forexcessive pay
Ordinary taxpayers should not have to foot thebill for excessive executive compensation. And
yet they do. Government contracts and subsidies
routinely make mega millionaires out ofcorporate executives, and tax loopholes such as
the preferential treatment of investment fundmanagers’ carried interest income and unlimited
tax-deferred retirement accounts perpetuate ourout of control executive pay system.

5. Extend accountability to broader
stakeholder groups
In 2019, the Business Roundtable declared thatthe corporations should aim to not just serve
shareholders ― the group’s oﬃcial position
since 1997 ― but “to create value for all our
stakeholders.” To go beyond rhetorical urgings
like this, corporate pay practices need toencourage CEO decisions that take into accountthe long-term health of the planet and the

3. Encourage reasonable compensation
limits and counter short-termism
The greater the annual reward an executive canreceive, the greater the temptation to makeinterests of all corporate stakeholders,
including consumers, employees, and theircommunities.
18

CEO PAY REFORMS RELATED TO TAX POLICY
Raising thecorporate tax
rate on firms
with wide gaps
between CEO
and worker pay

In addition to the federal bills noted above (the Tax Excessive CEO Pay Act and the CEO
Accountability and Responsibility Act), several cities and states have either adopted or are
considering tax penalties on corporations with large CEO-worker pay gaps. The city of Portland,
Oregon began collecting revenue from the world’s first such tax in 2018. Firms with a businesspresence in Portland that pay their CEO more than 100 times their median worker pay owe anextra 10 percent of their business tax bill. Firms over 250 times face a 25 percent extra tax. San
Francisco adopted a similar tax after a successful 2020 ballot initiative. A number of statelawmakers have also proposed tying tax rates to CEO-worker pay ratios.

Excise tax on
stock buybacks

The 2022 Inflation Reduction Act introduced a 1 percent excise tax on the repurchase of
corporate stock. The 2024 Democratic Party Platform proposes quadrupling this excise tax
and a Senate bill, the Stock Buyback Accountability Act (S. 413), would achieve this.

Limiting
executive taxdeferred pay

A 2023 Institute for Policy Studies-Jobs With Justice report found that the top fiveexecutives at S&P 500 firms held a combined $8.9 billion in special tax-deferred accounts at theend of 2021. These accounts are unlimited while ordinary taxpayers face strict limits on how
much income they can defer from taxes via 401(k) plans.
•
The CEO and Worker Pension Fairness Act (S.3341) would revise Section 409A of thetax code so that executives would owe taxes on their compensation when it vests.
•
In 2007, the Senate passed a minimum wage bill that would have limited annual
executive pay deferrals to $1 million, but the provision was dropped in conference
committee.

Ending thepreferential
capital gains
treatment ofcarried interest

Under current rules, managers of private equity, real estate, and hedge funds pay thediscounted capital-gains tax rate on so-called “carried interest” (earnings tied to a percentage ofthe fund’s profits). This income actually amounts to compensation for managing other people’s
investments and should be taxed as ordinary income.
•
The Carried Interest Fairness Act (S. 4123) would require carried interest income to be
taxed at ordinary income tax rates, raising an estimated $6.5 billion in revenue over 10
years.
•
Another proposal, the Ending the Carried Interest Loophole Act (S. 3317), would tax
carried interest at ordinary income rates and also prevent fund managers fromdeferring payment of taxes on wage-like income. The revenue estimate for this bill: $63
billion over a decade.

Limiting thedeductibility ofexcessive pay

In 1993, Congress amended the tax code to prevent corporations from deducting off theirtaxable income the amounts they pay top executives in excess of $1 million per executive —unless the compensation came as stock options and other forms of “performance” pay. Thishuge loophole encouraged corporate boards to hand out massive bonuses that dramaticallywidened pay gaps between corporate executives and rank-and-file workers.
The 2017 Republican tax law closed this “performance” pay loophole, but only for compensation
going to a corporation’s CEO, CFO, and three other highest-paid employees. As part of theAmerican Rescue and Recovery Act, Congress took another step forward by closing theloophole for compensation going to an additional five executives (10 in total). Pay above $1
million going to other highly paid employees — such as traders at large Wall Street firms —remains fully deductible.
•
Sens. Jack Reed (D-RI) and Richard Blumenthal (D-CT) and Rep. Lloyd Doggett (DTX) have sponsored legislation that would extend the $1 million deductibility cap to all
forms of compensation for all employees.
•
Richard Freeman and Douglas Kruse of Harvard University and Joseph Blasi of
Rutgers University have proposed that Congress only allow tax deductions for
executive bonuses when corporations award as much incentive pay “to the bottom 80
percent of their workforce as they do to the top 5 percent.”
19

Financialtransaction tax

Another way to generate much-needed revenue while curbing executive excess would bethrough a financial transaction tax on Wall Street trades. Various legislative proposals in the
Senate and the House, including the Wall Street Tax Act (S. 2491/H.R. 4870) and the WallStreet Speculation Tax (S. 1990/H.R. 4119) would curb the lucrative short-term speculation that
has inflated Wall Street bonuses while adding no significant value to the real economy.

PAY REFORMS TIED TO CONTRACTS, SUBSIDIES, OTHER PUBLIC SUPPORT
Leveraging
government
procurement
dollars toencourage
narrower CEOworker pay
gaps

By law, the U.S. government denies contracts to companies that discriminate, in theiremployment practices, on race or gender. Our public policy sends the clear message that our
tax dollars should not be subsidizing racial or gender inequality. We could also leverage thepublic purse to discourage extreme economic inequality.
•
Rep. Jan Schakowsky introduced the Patriotic Corporations of America Act (H.R. 4186)
to extend tax breaks and federal contracting preferences to companies that meet good
behavior benchmarks, including CEO-worker pay ratios of 100-1 or less.
•
Rep. Mark DeSaulnier’s CEO Accountability and Responsibility Act (H.R. 1284) would
provide similar preferences to encourage narrow pay ratios.
•
Sen. Bernie Sanders released a broad pro-union Workplace Democracy Plan in 2019that includes a ban on federal contracts to firms with CEO-worker pay ratios of morethan 150 to 1 or that outsource jobs, pay workers less than $15 an hour, or engage inunion busting.
•
At the state level, a Rhode Island bill would give preferential treatment in state
contracting to corporations that pay their CEOs no more than 25 times their medianworker pay. A Connecticut bill would disqualify companies with CEO-worker pay ratios
of more than 100 to 1 from gaining state subsidies and grants.

Stock buyback
disincentives
tied togovernment
contracts andsubsidies

In 2023, the Biden-Harris administration announced it would grant preferential treatment in theawarding of new CHIPS subsidies for semiconductor manufacturing to firms that agree to forgo
all stock buybacks for five years. This important precedent could be extended to all forms oftaxpayer-funded contracts, grants, and subsidies.

Pay ratio-linked
corporate
subsidies andbailouts

All forms of federal, state, and local corporate welfare could be required to incorporate CEOworker pay ratio guidelines in their qualification standards.
•
The Congressional Progressive Caucus has called on Biden to introduce suchincentives.
•
In 2015, then-Republican congressman Mick Mulvaney authored an amendment
designed to prevent the U.S. Export-Import Bank from subsidizing any U.S. company
with annual CEO pay over 100 times median worker pay. Mulvaney later directed the
Office of Management and Budget and served as President Trump’s acting chief ofstaff. Mulvaney’s proposal did not become law, but does suggest a potential forbipartisan action.
•
The European Union already applies similar pay ratio standards to state aid for failingbanks. Bailed-out banks operating within the EU have to cap executive pay at no morethan 15 times the national average salary or 10 times their average employee wage.

Leveraging
public pension
funds toencourage
narrower CEOworker pay
ratiosPublic employee pension fund investments offer a significant opportunity to influence corporate
pay behavior.
•
In 2023, the Marin County Employees’ Retirement Association adopted a position of
voting against any CEO pay package where the CEO makes more than 100 times thecorporation’s median worker, arguing that such pay is excessive and detrimental toreturns to shareholders.
•
The city of San Francisco has adopted an advisory resolution urging the San
Francisco Employees Retirement System to consider executive compensation and pay

20

•

ratios during decision making on investments and proxy voting. The resolution asks thepension board to report CEO-worker pay ratios at firms where the pension system
invests and to set guidelines for what constitutes “excessive” pay.
The New York State Pension Fund has a similar agreement that urges several large
corporations to reexamine their CEO and executive pay and adopt policies that take
into account the compensation of the rest of their workforces.

CEO pay limits
at public (orpublicly
supported)
institutions

In several states and countries, lawmakers and other groups have worked to crack down on
executive excess at firms receiving taxpayer support.
•
A 2013 New York State executive order prohibited service providers that annually
average over $500,000 in state support and receive at least 30 percent of their annual
in-state revenue from state funds from using more than $199,000 in state funds to pay
individual executive compensation. New York Governor Kathy Hochul rescinded theorder in 2022.
•
Unions pushed ballot initiatives in both Massachusetts and California in 2014 aimed atlimiting CEO pay at hospitals that receive taxpayer subsidies. In both cases, the unions
withdrew the initiatives after popular support helped them win other concessions.
•
Former French President François Hollande capped executive pay at firms where thegovernment owns a majority stake at 450,000 euros, or essentially 20 times theminimum wage. This limit later evaporated after pushback from corporate leaders.
•Management consultant Douglas Smith has called for a similar pay ratio limit on U.S.
firms receiving taxpayer funds.

Rein in CEO
pay at nonprofit
organizations

Under the 2017 tax law Republican lawmakers adopted, nonprofits may no longer deduct
executive compensation above $1 million on their federal tax filings. This represents a positive
step, but more could be done to ensure that taxpayers are not subsidizing excessive pay at
nonprofits that already receive preferential tax status. Huge paychecks for nonprofit health care
executive executives have motivated actions in several states.
•
In Washington, the state legislature is considering a new tax on nonprofit executive
compensation in excess of 10 times the state’s average annual salary.
•
In Connecticut, a state lawmaker introduced a bill that would require nonprofit hospitals
that pay executives more than $500,000 to pay property taxes.
•
Economist Dean Baker has proposed that paying executives no more than $400,000
per year — the salary of the U.S. president — should become a condition of keeping
nonprofit status for tax purposes. Another approach would be to set the cap at no morethan 20 times the pay of a nonprofit’s lowest-paid worker.

Fannie Mae andFreddie Mac
executive pay
caps

In 2015, Congress passed a bill to cap CEO paychecks at quasi-public Fannie Mae and Freddie
at no more than $600,000. In subsequent years, Fannie and Freddie have exploited loopholes
in the law to boost pay far above that limit for top executives. Each enterprise shifted duties
from the pay-limited CEO position to the uncapped positions of president and other top
executives. This loophole should be closed.

CEO PAY REFORMS LINKED TO CORPORATE GOVERNANCE
Stock buybacks

Since 1982, SEC Rule 10b-18 has allowed corporations to repurchase their shares on the open
market, with certain limitations. Buybacks have become a pervasive form of legal stock market
manipulation.
•
The Reward Work Act (HR 3694) championed by Rep. Chuy Garcia (D-IL) would ban
open market buybacks.
•
Sen. Bernie Sanders (I-VT) and Rep. Ro Khanna (D-CA) have authored a bill thatwould prohibit buybacks where CEO pay exceeds 150 times the compensation that
goes to a company’s median pay.
•
Sen. Sherrod Brown (D-OH) has introduced a bill requiring publicly traded companies
to issue a worker dividend equal to $1 for every $1 million spent on stock buybacks.

21•

Senators Cory Booker (D-NJ) and Bob Casey (D-PA) have introduced a similar Worker
Dividend Act.
The Biden-Harris federal budget proposal would ban top executives from selling theirpersonal stock for a multi-year period after a buyback, preventing CEOs from timing
share repurchases to cash in personally on a short-term price pop they themselves
artificially created. A Senate bill, the ALIGN Act (S. 790), would ban executives fromselling their shares within a year of a stock buyback announcement.

Corporateboard diversity

In at least a dozen European countries, workers have the right to representation in theircompany’s top administrative and management bodies. This has had a moderating effect on
CEO pay levels. In Germany, a nation with one of the world’s most highly developed systems forincluding workers in corporate decision-making, average CEO pay levels run about half as
much as the U.S. average. In a 2018 poll of likely U.S. voters, 52 percent supported placing
workers on major corporate boards and only 23 percent stood opposed.
•
Rep. Chuy Garcia (D-IL) has introduced the Reward Work Act (HR 3694) to require
corporations to allow employees to elect at least one third of board members.
•
Sen Elizabeth Warren (D-MA) has introduced the Accountable Capitalism Act torequire corporations with annual revenues over $1 billion to allow employees to pick at
least 40 percent of board members.

Signing andmerger bonus
ban“Golden hellos” and merger bonuses give executives a powerful incentive to wheel and deal
instead of working to build enterprises fit for long-term success. In 2013, Swiss voters adopted anational ballot initiative that, among other provisions, prohibits executive sign-on and merger
bonuses.

‘Skin in thegame’ mandate

Small-scale entrepreneurs seldom behave recklessly because they have their own personal
wealth tied up in their business. Executives of large corporations, on the other hand, face little
downside risk for irresponsible behavior.
•
In 2019, Rep. Katie Porter (D-CA) introduced a bill requiring publicly held corporations
to disclose whether they have established procedures to recoup compensation from top
executives to cover the cost of fines or penalties against their company.
•
Investment adviser Vincent Panvini has proposed that executives be required to placea share of their own financial assets in escrow for five or ten years. If a CEO’s company
loses value over that time, the CEO would forfeit money from that escrow.

A CEO pay limit
for firms inbankruptcy

Private equity funds have been connected to a rash of bankruptcies in recent years that often
lead to massive loss of jobs and reductions in employee benefits. A significant portion of thecompanies that have filed for bankruptcy carried huge debt loads left over from leveraged
buyouts by private equity firms. This trend has sparked increased interest in ensuring that CEOsand other executives at distressed firms do not enrich themselves while eliminating jobs andpensions.
•
The Stop Wall Street Looting Act builds on the Bankruptcy Abuse Prevention andConsumer Protection Act of 2005 (Sec. 331). This existing law prohibits companies
in bankruptcy from giving executives any “retention” bonus or severance pay that runs
over ten times the average bonus or severance awarded to regular employees in theprevious year. The new bill would strengthen this legislation by:
1) closing a loophole that exempts “performance-based pay” and expanding the ban beyond top
executives to the next 20 most highly paid employees, consultants, and department heads(Sec.304).
2) banning special payments to high-level executives if the company has not paid promised
severance pay to employees or has reduced employee benefits within the year before declaring
bankruptcy (Sec. 305).
3) blocking courts from approving a bankruptcy exit plan if top executives will receive payments
either excessive or not generally applicable to other employees (Sec. 306).

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Abolishexecutive
performancepay

At best, stock options and other performance-pay incentives have CEOs thinking more about
their own personal rewards than long-term enterprise sustainability. At their worst, “pay for
performance” deals encourage criminal behavior.
•
Michael Dorff of the Southwestern Law School has proposed a ban on “performancepay.”‘Say on Pay’
with teeth

Under the 2010 Dodd-Frank law, U.S. shareholders gained the right to a non-binding vote on
executive pay packages. Several options could further empower shareholders.
•
Make say-on-pay votes binding. The UK already requires public companies to give
shareholders a binding vote on compensation every three years.
•
A former EU internal markets commissioner has proposed that shareholders should
also have the power to vote on the ratio between the lowest- and highest-paid
employees in a firm.
•
In Australia, shareholders have the power to remove directors if a company's
executive pay report gets a “no” vote from at least 50 percent of shareholders.
•
Dean Baker of the Center for Economic and Policy Research has proposed that
corporate directors have their compensation denied if a CEO pay package they haveapproved fails to gain a majority in a “say on pay” vote.

Claw backunearned pay

Executives should not get to keep compensation based on unachieved performance goals.
•
Section 954 of the 2010 Dodd-Frank law requires executives to repay compensation
gained as a result of erroneous data in financial statements. The SEC finally issued afinal rule on this section in 2022, requiring executives to repay “excess” incentive
compensation received during the three-year period preceding an accounting
restatement. Clawback provisions in the earlier Sarbanes-Oxley Act only applied torestatements resulting from misconduct. The U.S. regulation could be stronger. Under
UK rules, for instance, the clawback period runs 10 years.

WALL STREET PAY REFORMS
Pay restrictions
on executivesof large
financial
institutions

Executive compensation played a key role in the reckless behavior that led to the 2008 financial
crash. In response, Section 956 of the 2010 Dodd-Frank financial reform law prohibits large
financial institutions from granting incentive-based compensation that “encourages inappropriate
risks.” After dragging their feet for 13 years, federal regulators are currently working on
producing a final rule on this provision.
A coalition led by Americans for Financial Reform and Public Citizen are advocating for threechanges to strengthen the regulators’ 2016 proposal:•
Require executives to defer a significant percentage of compensation for 10 years, andmake them forfeit these sums if the financial institution fails or gets hit with misconduct
fines. Rep. Rashida Tlaib has also introduced a bill, the Fostering Accountability inRemuneration Fund Act, or FAIR Fund Act, along these lines.
•
Ban stock options for financial executives, since they promise executives all thebenefits of share price increases with none of the risk of share price declines.
•
Ban executives from hedging bonus pay: Any effort to reduce inappropriate risk-taking
will be ineffective if executives can use hedging strategies to reduce their risk from poor
company performance.

Claw back
executive pay
at failed banks

The failure of several regional banks in early 2023 provoked a wave of demands foraccountability. Senator Sherrod Brown (D-OH) and Senator Tim Scott (R-SC), the leaders of the
Senate Banking Committee, introduced a bipartisan bill, the Recovering Executive
Compensation Obtained from Unaccountable Practices (RECOUP) Act, to claw backcompensation of senior executives at failed banks and penalize them for their misconduct. The
bill quickly passed out of committee but the full Senate has not yet voted on the bill.

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Banker bonus
limits•EU rules introduced in 2014 limit banker bonuses to no more than annual salary, or up
to 200 percent of annual salary with shareholder approval. The cap applies to bankers
in non-EU banks located in the EU, as well as senior staff — including Americans —working for EU-based banks anywhere in the world. This reform aims to help counterthe “bonus culture” that encourages high-risk investing. Under a conservative
government, UK regulators lifted the cap for that country in 2023.

Strict caps on
executivecompensation
for bailout firms— before thenext crisis•

In 2009, the Senate approved an amendment that would have capped pay at bailed-out
companies at $400,000, the salary of the U.S. president, but this amendment stalled in
the House. Covid-related bailouts adopted in March 2020 for the airlines and otherfirms included only very weak restrictions, allowing CEOs to continue to pocket megamillion-dollar paychecks. In the EU, by contrast, bailed-out banks have to cap their
executive pay at no more than 15 times the national average salary or 10 times thewage of their average bank worker. UK rules ban bonuses for executives of banksreceiving bailouts. Given a warning about the consequences for their own paychecks,
executives might think twice about taking actions that endanger their own future — andours.

Cracking down
on investment
fund manager‘monitoring’fees

Private equity fund managers make a killing off the so-called “monitoring” or “transaction” fees
they charge corporations they have taken over through leveraged buyouts that typically drain
value from the acquired enterprise.
•
The Stop Wall Street Looting Act applies a 100 percent tax on such fees paid byacquired firms to private fund managers.

PAY DISCLOSURE REFORMS
Gender pay gap
disclosure

The average U.S. woman earns 84 cents for every dollar a man earns and the gaps are evenwider for women of color. Requiring corporations to disclose their own gender pay gaps would
help reveal which firms are contributing the most to gender disparities.
•
Congress could require U.S. corporations with 100 or more employees to disclose theirgender pay gaps to the public. This would impose very little cost on companies, sincean EEOC rule already requires reporting of pay data by race and gender.
•
The UK government is already requiring gender pay gap disclosure for private andpublicly held companies with over 250 employees.

Racial pay gap
disclosure

As of the third quarter of 2023, the median white worker made 24 percent more than the typicalBlack worker and around 28 percent more than the median Latino worker, according to BLS
data. Requiring isclosure of racial pay gaps would reveal which corporations have the greatest
pay discrepancies.
•
Congress could require U.S. corporations with 100 or more employees to disclose their
racial pay gaps. This would impose very little cost on companies, as noted above, sincea new EEOC rule requires reporting of pay data by race and gender.

CEO-worker
pay gap
disclosure forprivately heldcompanies

Only publicly held firms must now report to the SEC the compensation of their top executives
and their CEO-median worker pay gaps. But extreme pay divides at large privately held
corporations pose equally significant threats to our economic health. These divides contribute to
our country’s extreme economic inequality and encourage high-risk executive behavior.
•
The Tax Excessive CEO Pay Act would require this disclosure, as part of a tax reform.
•
Congress could also expand on the 2008 Government Funding Transparency Act,legislation that requires certain federal contractors to disclose their five top-paid
officers’ pay. The rule applies to firms that earn at least 80 percent of their revenue
from federal contracts, grants, and loans and that received $25 million in federal
funding the previous year.

24Disclosure of
CEO trading tocapitalize on
stock buybacks

In 2023, the SEC issued a new regulation requiring companies to provide much more detailabout their buyback activity, including whether top executives bought or sold company shares
during the four days before or after a buyback announcement. Even though designed to simply
provide investors with basic information about this rampant yet opaque practice, the Fifth Circuit
Court of Appeals struck down the rule following a Chamber of Commerce lawsuit. A
bipartisan letter by Senators Tammy Baldwin and Marco Rubio calls on the SEC to re-propose
the rule, as does a coalition letter that includes various labor unions as signatories.

Disclosure of
executive
versus worker
raisesRep. Nydia Velázquez (D-NY) has introduced the Greater Accountability in Pay Act (H.R. 1188),a bill that would require publicly held corporations to annually disclose the ratio between pay
raises for top executives and median employees.

Increaseddisclosure ofgovernment
support

Corporations should be required to disclose more information about how they benefit fromgovernment contracts, subsidies, and specific tax breaks. How much of this federal investment,
for instance, do individual corporations funnel into executive pockets versus worker pay andother long-term investments?

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