ON FINANCIAL REFORM
versight and reform of Wall Street is critical and necessary. Big money’s predatory schemes in the housing market literally broke America and destroyed the world economy. How did we respond, the Bush administration handed banks billions of free dollars with no strings attached. Unlike the auto companies that received government loans that required the taxpayers be paid back with strict rules levied to insure the companies would come out stronger and better managed, the Wall Street bailout gifted the bankers taxpayer money to reward themselves with huge bonuses. How ironic, the very people that destroyed our economy and devastated millions of people’s lives were given tax dollars to give to themselves.
Fortunately the Obama administration passed financial reforms that begin the needed process of oversight and regulation of some financial practices such as the unfair credit card charges and fees that now are somewhat under control.
Even with these reforms we must be vigilant and continue to pursue greater oversight and reform. Recently at an annual meeting of JP Morgan, Jamie Dimon, CEO, reported a massive loss of $5.8 to $9 billion bank dollars, apologizing that the losses were poorly vetted and that he couldn’t justify it and it never should have happened. At the same meeting the bank awarded Dimon with a $23 million pay package.
Wages for the average working American has stagnated for an entire decade. Median households average wage fell $3,700 in that period. As the workers suffered the CEOs of the S&P 500 Index received an average of $12.9 million in pay in 2011 – a 14% increase. Believe it or not this is on top of a 23% increase in pay in 2010. When was the last time you saw a 14% or a 23% pay increase in a single year. The ratio of CEO to average worker pay is an astonishing 380 to 1. All of this while our economy suffers in nearly every area. Our country hasn’t seen such a disparity in pay since the Great Depression.
The Dodd-Frank Act, a key piece to recently implemented financial reforms, included a ‘say-on-pay vote’ that allows shareholders to vote on certain executive compensation. As a result of the legislation already in 2012 four companies including Citigroup vote against enormous pay packages.
Its time for the SEC to implement another key piece of the financial reforms, the Dodd-Frank Act requirement that public companies disclose their CEO to worker ratios so that shareholders can see and realize exactly what they are voting on.
I am not at all opposed to those CEOs and other Company executives that lead their corporations receiving great pay as a reward for their hard work, intelligence, dedication and performance. I just do not believe that a CEO is worth $14 million dollars a year or deserves a 14% or 23% raise when those that work for the same company receive no or little pay increases, are burdened with the shifting of additional health care costs or have lost their health care completely and are cut short on their pensions. Asking for full disclosure is the least we can do in the face of this corporate greed.