I am sponsoring a friend on the Obliteride bicycle ride this month. The funds she raises “empower people to help cure cancer faster by raising funds for Fred Hutchinson Cancer Center.” So that sounds good.
…And then I looked at the Fred Hutch executive salaries and found that its president made over $1.7 million, their senior vice president made over $1.2 million and a “special advisor” made over $1.1 million. Even their vice president for philanthropy made over half a million dollars.
Do these sums of money have anything to do with curing cancer? What if they made just $500,000 a year — that is, 1,527% of the state minimum wage? $500,000 puts them comfortably in the top 1% of salary and wage earners in our state. But with salaries like these, you get the feeling that their motivation is not curing cancer, but simple greed.
Of course, Fred Hutch looks like peanuts when we consider out-of-control companies like Boeing. Boeing’s CEO, David Calhoun, was awarded $21 million in 2022 for a year of overseeing the 737 Max debacle, shifting all 787 production to South Carolina and flubbing quality control, failing to develop the 777 on time and doing everything he could to break workers’ unions at Boeing. But all that seems to be worth a compensation package that is 64,143% of the minimum wage.
Boeing is not alone — just extreme, as are others: Satya Nadella, Microsoft’s CEO, pulled in $55 million in 2022. The company’s president — and chief emissary for good will — Brad Smith received $23,408,739. In 2021, Amazon’s new CEO, Andrew R. Jassy, gained a cool $212 million. Adam N. Selipsky, CEO for Amazon Web Services, received $41 million. Right now, corporate compensation committees formed of already over-paid peers determine the compensation of CEOs. The determination has nothing to do with added value and everything to do with avarice.
Other, less obvious executives are also grabbing whatever they can. The University of Washington football coach and basketball coach each received more than $3 million in 2022. The top three executives at Seattle Children’s Hospital made over $1 million each. The former president of the Marguerite Casey Foundation made $1,682,197 in 2021 — after she left that position! In 2021, the CEO of the Group Health Community Foundation made over $600,000 while running a foundation that seeks to “transform the balance of power to ensure equity.” Her compensation equals 1,836% of the year-round, full-time minimum wage.
Rather than shaking our heads and thinking, “Well, that’s bad, but that’s the way it is,” we could actually put a lid on these extortions for personal gain. We have a minimum wage set by law. We can legislate maximum compensation — if only our legislative leaders had the courage to do so.
What maximum compensation would make sense? Let’s start with a figure so that those people “earning” these ridiculous numbers receive in one week what minimum wage workers make in a year. That would be about $1.7 million. Seems a bit high, but still lower than what most of these salaries currently are. What about $1 million? That is more than 30 times what a full-time minimum wage worker makes.
If executives weren’t grabbing it, where would that money go? Higher pay for workers. Research and development. Less expensive food and medicine and health insurance, for example.
And if putting a lid on maximum compensation is too much for the Legislature, how about just taxing the excess at 50% and putting that money into lowering health care costs and college and community college tuition for Washington citizens?
In 2021, annual wages rose 18.5% for the top 0.1% (the corporate elite) and 9.4% for the top 1% of earners. For the bottom 90% of workers — that is, the people who actually do the work — earnings fell between 2020 and 2021. Between 1979 and 2021, the bottom 90% of workers altogether lost over 11% of total wages, while the top 1% gained 4.3% of total wages, so that the wage and salary share of this 1% is now more than 14% of total earnings in the United States.
This theft of income has been led by business elites and allied political leaders. They have suppressed workers’ wages, refused to negotiate with unions (consider Starbucks and Amazon), failed to enforce labor standards for overtime and wage theft and put into law sharp cuts in marginal tax rates for the wealthy.
This trend can also be unwound by political leaders, if they so choose. Here in our state, we have taken on the minimum wage, setting a standard for the rest of the country. We have continued to support workers in both public sector and private sector unions, with about 20% of workers in union jobs (the third highest in the country). But we haven’t tackled excessive compensation. It is about time we did. All it takes is a Legislature and a governor willing to lay down the law.
Read more of the Sept. 13-19, 2023 issue.