46 Groups Call for Salary Caps, Bans on Buying Back Stock
WASHINGTON, D.C. – Congress should condition any additional coronavirus-related corporate bailout money on strict executive compensation limits, including banning stock buybacks and capping salaries, Public Citizen and 45 other groups said in a letter today to congressional leadership.
In the recently passed $2.3 trillion CARES Act, which allocated $500 billion to big business, no compensation conditions were placed on senior managers. While a handful of CEOs have voluntarily opted to forgo some or all their base salary in the coming months, this form of compensation makes up a small fraction of typical executive pay packages at large companies.
As Congress debates further stimulus funds, certain conditions must apply, the letter said. The groups call for conditions on bailout aid, including that CEO pay cannot exceed 50 times the median pay at the firm and that an escrow account containing salary money for senior managers will be set up to pay to penalties if corporations later are found to have engaged in misconduct relating to the bailout money. In addition, stock buybacks should be banned until aid is repaid, and corporations must not be allowed to deduct as a business expense the salary paid to any employee that exceeds $1 million.
“Trillions in aid should go to workers, not senior managers,” said Bartlett Naylor, financial policy advocate for Public Citizen. If the CEO and senior managers know they will have to pay penalties personally when misconduct is uncovered, they’ll be at least a smidge more careful about unlawful profiteering.”
Groups signing the letter include NAACP, Greenpeace, AFSCME, Teamsters, SEIU American Federation of Teachers, Institute for Policy Studies, As You Sow, Oxfam, Interfaith Center on Corporate Responsibility and Indivisible.
View the letter here.