U.S. Gov’t Underestimates Income Inequality

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According to a new analysis by The Atlantic, corporate executives are making way more money that anybody reports.

The AFL-CIO reports that the total pay of the CEOs of America’s largest corporations was, on average, 373 times larger than the earnings of an average American worker in 2014. Surprisingly this number is actually grossly underrated.

If you look at the data on these executives’ actual take-home pay, which is published in companies’ annual filings with the Securities and Exchange Commission (SEC), the actual amount that senior executives made is 949 times as much money as the average worker.

This has to do with how the SEC reports “estimated fair value” (ECV) of executives’ stock-based pay. What should really be being reported is the actual realized gains, or ARG, on stock-based pay. ARG is a figure that permits the calculation of senior executives’ actual take-home pay.

For the full analysis and breakdown, please visit The Atlantic here.

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