Photo: nozomiiqel on flickr
Executive pay has now exceeded pre-recession levels and, despite measures added by Dodd-Frank, less than 2% of U.S. companies have been forced by shareholders to change CEO compensation.As the pay gap grows, however, governments around the world are looking for new restrictions, according to Reuters. British lawmakers are debating their own version of Dodd-Frank. In April the European Commission proposed that companies disclose boardroom and CEO pay, to be voted on by shareholders. On the other side of the globe, Australia just passed a new “two strikes” rule — which lets shareholders replace a board if they don’t approve pay plans for two years in a row.
In the U.S., CEOs are paid 142 times more than their employees; in Britain, it’s 69-1, and Sweden, 34-1, according to Reuters.
This could be the start of a sea change. Carol Bowie, director of research at Institutional Shareholder Services, says that executives are “entering a new era of investor scrutiny,” according to the NY Times.
But regulating the pay gap won’t be easy. Some of the highest CEO salaries are at companies with low pay gaps, like Goldman Sachs, because everyone gets paid a lot. The biggest pay gaps are at companies like KFC and McDonald’s where workers and executives are a world apart.
In its annual ranking, Forbes found Stephen Hemsley of UnitedHealth ($101 million), Ed Mueller of Qwest Communications ($65 million) and Robert Iger of Disney ($53 million) to be the richest CEOs in America.
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