The CEO and the New Feudalism
Typical leader of a top 100 firm makes in three days what average worker must toil a year to earn.
By Murray Dobbin
Few developments in our era of savage capitalism are so powerfully symbolic of the new feudalism than the obscene compensation paid out to the new economic elite, the CEOs of the most powerful corporations in the country. The Canadian Centre for Policy Alternatives’s Hugh MacKenzie now reminds us yearly of this economic and social sickness by identifying exactly when the average CEO (of the 100 largest firms) has earned as much as the average worker makes in a year (this time around it was by 2:30 p.m. on Jan. 3). The average total compensation for Canada’s 100 highest paid CEOs was $6,643,895 in 2009.
The social and political implications of this grotesque overcompensation are more important than the actual dollars. Socially, in terms of class, it represents the ruling elite’s deliberate and conscious declaration that they will take as much money as they want out of the system simply because they can. It is the most powerful way that the elite can make clear that they have nothing in common with the rest of us. Their excess compensation has little to do with their value to a firm, their contribution or their ability.
Yet, says MacKenzie, the disparity between CEO compensation and the average worker’s pay continues to grow: “In 1995, the average pay of Canada’s highest paid 50 CEOs was $2.66 million, 85 times the pay of the average worker. In 2009, the average pay of the highest paid 50 CEOs had skyrocketed to 219 times the pay of the average worker.” The ratio for the top 100 went from 104 times in 1998 to 155 times in 2009.
It is the modern equivalent of the power and arrogance of the robber barons of the 1920s.