CEO and coin stacks According tothe report’s authors, “CEOs are getting more because of their powerto set pay, not because they are increasing productivity or possessspecific, high-demand skills.” (Photo: Shutterstock)

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You know it’s bad when heiress Abigail Disney chastises CEOsover how much they rake in each year.

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With workers feeling underpaid despite the so-called “recovery,”one might ask what they’re complaining about, since wages haverisen (a little) since the Great Recession. But the truth is thataccording to the Economic Policy Institute, employees are onlygetting about 12 percent more than they did 40 years ago—back in1978, when a loaf of bread cost 33 cents and a person could buy ahouse for under $65,000.

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Related: The GOP wants to kill rule that led to astronomicalCEO pay

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The EPI analysis found that while CEO pay has risen940.3 percent between 1978 and 2018 (or 1007.5 percent, dependingon how stock options are accounted for), worker pay has grown apitiful 11.9 percent. That amounts to CEOs at the top 350 firms in2018 taking home an average of $17.2 million—278 times what workersmake. Meanwhile, back in 1965, the ratio of CEO-to-worker pay was20 to 1, and even as recently as 1989 it was 58 to 1.

“Exorbitant CEO pay is a major contributor to rising inequalitythat we could safely do away with,” study authors LawrenceMishel and Julia Wolfe contend. ”CEOs are getting morebecause of their power to set pay, not because they are increasingproductivity or possess specific, high-demand skills.”

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“When every industry stock goes up, their stock goes up, andthey’re rewarded as though they hit a triple,” Mishel saidin a CBS News report. ”That’s notfor performance as they are sitting in the bleachers.”

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And according to Wolfe, “Ballooning CEO pay is not a reflectionof the market for executive talent. We know this because CEOcompensation has grown far faster than even the top 0.1 percent ofearners. This means that CEO pay can be curbed with little, if any,impact on the output of the economy or firm performance.”

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CBS News also highlights Ms. Disney’s efforts on behalfof underpaid workers, as she not only criticizes CEO pay—calling ita “moral issue”—but highlights the fact that some low-wage workersare “sleeping in their cars and rationing insulin,” and workers mayoften be laid off without severance at the sametime executives are lining their cofferswith buybacks and cash dividends.

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The solution? The authors offer several possible policy changes.“Implementing higher marginal income tax rates at the very topwould limit rent-seeking behavior and reduce the incentives forexecutives to push for such high pay,” they write. “Another optionis to set corporate tax rates higher for firms that have higherratios of CEO-to-worker compensation … Other policies that couldpotentially limit executive pay growth are changes in corporategovernance, such as greater use of ’say on pay,’ whichallows a firm’s shareholders to vote on top executives’compensation.”

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