This seems like a good time to bring up RHD's One Percent Solution again, in the wake of a
report by the Philadelphia Inquirer on CEO compensation in this area. The Inquirer simply reported the numbers, without trying to bring up a discussion of income inequality. But, really
– can you see a CEO salary of $87 million and not think a little about the concept?
Another important point that the Inquirer story missed was how many of those well-paid CEOs are helming companies that are laying people off. Amazingly, those same companies are providing a pension for those same CEOs – because, apparently, after pulling $12 million a year for while, you need a nest egg to fall back on that has to be provided by the company. This, while those same companies are laying people off to make the balance sheets come out.
Revenue is not infinite. It is a pie that has to be divided up. Income inequality that tilts too much of that pie to the favored few is crippling our economy, crushing the middle class and swelling the unemployment rolls through layoffs that are all about keeping the CEO’s salary and bonus as high as possible. Income inequality is at an all-time high, surpassing Great Depression levels. In the 1970s, corporate chief executives earned 30 times as much as their average worker. Today a CEO makes 364 times as much as their average worker.
Not surprisingly, not a single CEO contacted by the Inquirer was willing to comment for the record. When it comes to massive salaries and disturbing income disparity, they don’t want to talk about it. Of course that’s wrong. In a capitalist, free-market economy some people make more than others. That’s OK. But knowledge is better than ignorance. Light is better than darkness. So let’s talk about it.
At RHD we have a thriving program called the One Percent Solution, in which I contribute one percent of my CEO salary into a pool anyone can draw from (more info on how it works here). This also opens a discussion about the massive issue of income inequality in our society. Income inequality creates tremendous social problems, violence and disruption at the basic levels of our society – and it’s only getting worse. I invite other executives to offer One Percent Solution clubs in their corporations. Your relationship with your co-workers, after all, doesn’t end at payday. Just think what a CEO making $87 million a year could accomplish within his corporation with a One Percent club!