So much so, in fact, that Trumka appeared on CNBC and pushed the position that shareholders should be given the power to decide CEO pay.
Shareholders should be given the power to decide CEO pay to fix a system that leads to outsized executive compensation, AFL-CIO President Richard Trumka said Wednesday.
“Shareholders don’t get to decide what CEOs make. There’s a compensation committee that does that. When the shareholders vote, you know it’s only advisory,” the head of the country’s largest labor federation said on CNBC’s “Squawk Box.” “We’ve had vote after vote where they’ve said, ‘Cut the pay,’ and management has just ignored that.”
For all his diatribe about shareholders deciding CEO pay, his rhetoric rings hollow considering that union members do not directly decide what union executives make either—let alone Richard Trumka’s salary.
Related:
- Union Leaders Decrying CEO Pay Also in Top 1%
- Don’t Tell The AFL-CIO, But The Average CEO Only Makes $178K
In fact, like corporations, individual unions have committees to reccommend compensation for union executives. If rank-and-file union members hear about union leaders’ salaries, it is usually after the fact.
That is because compensation decisions are typically made at union conventions that are attended by top union leaders—who are often beholden to the higher-up union executives—then enshrined in the individual union’s constitution.
However, at the AFL-CIO, decisions on AFL-CIO executives’ compensation—for people like Trumka—are determined by the AFL-CIO’s Executive Council, which is made up almost entirely of presidents of the nation’s unions.
While one could make the argument that commparing CEO pay to union bosses’ pay is like comparing apples to oranges, since unions are not corporations, that would be correct: CEOs typically oversee for-profit companies that produce products and services, unions do not.
Perhaps, given the structure of unions, a more similar commparison would be comparing unions to the federal government. When is the last time Americans got to decide Congressional Pay, or that of the President?
