Unchecked CEO Pay

Copyright © 2008 AFL-CIO | American Federation of Labor – Congress of Industrial Organizations

Hear AFL-CIO Secretary-Treasurer Richard Trumka discuss how unchecked CEO pay contributed to the subprime mortgage crisis and the nation’s economic crisis

The chief executive of a Standard & Poor’s 500 company made, on average, $14.2 million in total compensation in 2007, according to preliminary data from The Corporate Library. Problems with executive compensation came to a head in 2007 with large severance packages given to CEOs of companies at the center of the mortgage crisis. The International Monetary Fund estimates that the financial turmoil set off by the collapse of the mortgage market could total nearly $1 trillion. Yet, chief executive officers of the firms most responsible for causing the crisis collected hundreds of millions of dollars in pay last year. This highlights the need for further reform to protect companies and their investors.

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