On Thursday, our friends at As You Sow released their fifth annual report on the 100 Most Overpaid CEOs. The launch included a webinar with Rosanna Landis Weaver (the report’s author), Paul Herman (founder and CEO of HIP Investor), and ex-Secretary of Labor Robert Reich.
Not only are these 100 CEOs overpaid concerning the poor performance of their companies, many fund managers, like BlackRock, Vanguard and StateStreet, routinely endorse the executive compensation package of these CEOs at the annual shareholder meeting. The report points to necessary actions by shareholders concerning executive compensation. It really is worth your time to dive in.
Axios.com offered succinct coverage of the webinar and report here.
The report can be found here. The webinar can be found here.
Four SGI members participated in ICCR‘s Spring Conference: Sr. Ruth Battaglia, C.S.A., Chris Cox, Frank Sherman, and Friar Robert Wotypka, O.F.M., Cap. We will report back what we heard and learned in a variety of ways in the coming weeks.
Today’s tweet from Pope Francis reminds us that preventing evil is not enough; we must take positive action together. Since its inception, SGI has endeavored to make the voices and concerns of those who suffer injustice the center of our reflection and action. I see it reflected as well in the work of the new Racial Justice Investing group within ICCR.
National events in 2017 intensified focus on racial, ethnic, and gender equality. The #MeToo movement, protests concerning the Confederate Flag and Confederate statues, the Women’s March, and the Black Lives Matter movement all contributed to this shift in focus. While personal conversion is vital to change, it is not enough. Addressing systemic injustice requires changes in structures at the level of policy, economics, and worldviews.
A session at the recent ICCR conference included a session from the newly formed Racial Justice Investing group. Pat Tomaino of Zevin Asset Management chaired the session. We also heard from Lisa Hayles of Boston Common Asset Management, Susan Baker of Trillium Asset Management, and Mari Schwartzer of NorthStar Asset Management. Hayles spoke of The 30% Coalition (that corporate boardrooms reflect the gender, racial and ethnic diversity of the United States workforce). Susan Baker discussed workforce diversity and the case for pressing companies to make the composition of the workforce transparent. Schwartzer voiced concerns about prison labor (NPR reported on some of the issues). Finally, Tomaino addressed diversity and inclusion, especially within the tech workforce.
The Racial Justice Investing group has monthly/semi-monthly calls and has a webpage within ICCR’s member area where SGI members can sign up to participate and to receive regular updates. Previously, the group drafted a Mission Statement:
Racial Justice Investing is a group of socially responsible investors and others in the business community who are taking action for racial justice within our own organizations, as well as in our engagements with portfolio companies.
The TJX Companies, which includes well-known discount chains of TJ Maxx, Marshalls and Home Goods, is the leading off-price apparel and home fashions retailer in the U.S. …and worldwide. They claim 40 years of sales and earnings growth to the satisfaction of their shareholders. But not all shareholders are happy. “TJX maintains one of the largest pay gaps in America,” said Mark Peters, Director of Justice, Peace and Reconciliation for the Priests of the Sacred Heart. “As public scrutiny of the gap between CEO and worker pay increases, TJX may be risking the health of its labor force and the reputation of its brand.”
Mark filed a shareholder resolution with TJX concerning their executive pay policies and the widening pay gap with their workers for the third year in a row (see proxy memo). “The company’s proxy states that developing and retaining talent is a key component of their continued success. But this attention should not be limited to their executives. Their Associates’ pay has stagnated while executive compensation packages continue to escalate. Long term, this hurts the company and society.”
CEO pay has grew by almost 1000% over the past 40 years, greatly outpacing the growth in the cost of living, the productivity of the economy, and the stock market. This disproves the claim that the growth in CEO pay reflects the performance of the company, the value of its stock, or the ability of the CEO to do anything but disproportionately raise the amount of his pay (Economic Policy Institute).
Beginning in 2018, a Dodd-Frank Act provision requires companies to report the ratio of the CEO’s total compensation and that of their median employee. While the Trump administration is reviewing this requirement as too burdensome, Mark believes that it is not enough. “Shareholders need a historic view of this ratio and board’s informed view on whether the CEO-to-worker pay gap comes at the expense of the health of the Company’s human capital and long term shareholder value.”
Seventh Generation Interfaith members Congregation of St. Agnes, Franciscan Sisters of Perpetual Adoration, Dana Investment Advisers, Province of St. Joseph of the Capuchin Order, Racine Dominican Sisters, Priests of the Sacred Heart (U.S. Province), School Sisters of St. Francis, and Sisters of the Presentation of the Blessed Virgin Mary, joined over 100 institutional investors in a letter to the SEC in support of maintaining existing CEO-to-worker pay ratio disclosure requirements.