In a recent interview, Mary Barra, CEO at GM, justified her almost $30 million in compensation for 2022 by claiming that almost 92% was a bonus based on company performance, aka, doing her job. By implication, her $2.4 million salary should be considered a retention bonus to stick around and make some real money! Her income was 362 times the median income for all GM employees. And she doesn’t understand why the UAW workers will not consider the ‘generous offer’ the company has made. Can you say ‘...out of touch...’
And it’s not as though Barra is out there alone. The CEO’s at Ford and Stellantis earned $21 million and $25 million respectively, 281 times and 365 times their median employee incomes.
This is a uniquely North American situation. By comparison, look at the CEO compensation of their competitors.
Toyota - $6.7 million
Honda - $2.3 million
Nissan - $4.5 million
BMW - $5.6 million
Porche - $7.9 million
Mercedes - $7.5 million
The corporate feeding trough in North America is stunningly out of touch with reality. Since the late 1970’s average CEO compensation has risen 1322%! This is unparalleled greed.
It's not like all CEOs are geniuses. Both GM and Stellantis were effectively bankrupt in 2008 requiring massive government intervention to stay afloat.
Most of these ‘leaders’ are anything but unicorns. Ask this question ‘...what would happen to Company X if the CEO was hit by a bus...’ If the answer is that the company would fail, then the CEO has failed to do one of their primary tasks in ensuring a chain of continuity. If the answer is that the company would carry on and replace the individual, then my point is proven.
Executive compensation has become outrageous and inconsistent with the actual contributions made by the individual. When average employees ask for fairness in wage negotiations, we cannot take those demands out of context. Does Mary Barra really contribute as much as 362 employees? Expressed in another more tangible way ‘...is it right that Mary Barra makes more before lunch on the first workday of the year than the average employee makes in a year...’
There is more than enough blame to share for this inequity. Compliant compensation committees on Boards of Directors; executive search firms whose own fees are a function of the executive compensation; HR leaders who neglect to represent ALL employees. And finally place blame on the major investors who turn a blind eye to the whole mess if stock returns meet or exceed their expectations.
Employment equity includes compensation equity. The disparities demonstrated in the executive ranks have reached absurd levels because there are far too many so-called leaders who are similarly out of touch.
We need a large dose of reality. I am pretty sure that Barra, and others like her, could learn to get by on $5-6 million a year...
I acknowledge a recent BBC article for the salary information contained herein.
