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Reich writes: "Exxon Mobil chief executive Rex W. Tillerson is delivering bad news to shareholders: Profits were down 63 percent in the first quarter financial results, announced yesterday. But don't cry for Tillerson. He's scheduled to retire next March with a nest egg of $218 million in Exxon stock plus a pension plan worth $69.5 million."

Robert Reich. (photo: Steve Russell/Toronto Star)
Robert Reich. (photo: Steve Russell/Toronto Star)

Even When Big Corporations Lose, Their CEOs Always Come Out Winners

By Robert Reich, Robert Reich's Facebook Page

29 April 16


xxon Mobil chief executive Rex W. Tillerson is delivering bad news to shareholders: Profits were down 63 percent in the first quarter financial results, announced yesterday. They were down by half in 2015. Low petroleum prices have forced Exxon Mobil to cut spending, reduce capital outlays, and borrow to meet dividend payments. This week Standard & Poor’s downgraded the corporation’s credit rating.

But don’t cry for Tillerson. He’s scheduled to retire next March with a nest egg of $218 million in Exxon stock plus a pension plan worth $69.5 million. His salary this year alone is about 500 times the median U.S. household income.

Even when big corporations and their shareholders lose, their CEOs seem always to come out winners. Isn’t it time CEO pay was capped at, say, 100 times the income of the median household? Shareholders should set this standard, and the government shouldn’t allow a company to deduct any executive pay in excess of $1 million.

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+31 # Jim Rocket 2016-04-29 21:45
Wasn't it that great socialist philosopher, J. P. Morgan, who said that executive compensation should max out at around 30 times that of the average worker? I think it's something like 350 times in a lot of big companies. Prof. Morgan also said that any more than 30 times would lead to social unrest. Smart guy.
+21 # Shades of gray matter 2016-04-29 22:10
J. Powerpoint meant 30X ALL his workers, combined. Needed $$ to finance WWI. I don't care if shareholders want to pay execs $25B/year as long as 95% of everything over $1M is taxed away. HRC thinks she doesn't need Bernie because she'll have a lock on the Center. Not much Center left. But Hillary should heed his warning: these are not ordinary times. YUUGE changes are needed. Ex., Progressive taxes on "earned" & "unearned" income to finance Infrastructure Revolution.
+12 # kalpal 2016-04-30 07:09
Congress can change the tax code, the president can merely propose a change.

If you vote for the Guardians Of privilege you're a traitor to 99% of America's populace.
+19 # mh1224jst 2016-04-30 03:39
Yes. Excess profit-taking, coupled with insufficient taxation of high incomes and corporate earnings, is the major cause of our inequality woes.

Exxon/Mobil have traditionally taken in a lot of tax dollars as well, as subsidies for oil exploration. Mobil's CEO a few years back testified that it was necessary because exploration and drilling is so expensive. But that was when the company was earning huge profits, so those costs were already covered. They just used the subsidies to add to their profits. This has always been a scam, in my view. (Anyway, now we should be trying to save the planet, and cutting back on oil exploration!)

We need to clamp down hard on executive pay levels. Cap them, and then limit how much they can keep by reinstating high top tax rates. We need to get back to a top FIT rate of at least 70%.
+10 # tswhiskers 2016-04-30 09:03
Yeah, let us "weep" for the CEO's of big oil. I guess that big oil is no longer making the big money to which it has become accustomed. As for capping their pay, I can't believe it would ever happen. I'd love to know what these sob's think poverty looks like. I am so "crushed" to read that they are having to borrow money to pay their dividends. God forbid they should use some of their stock and bonuses instead. These people are truly insane; it's more than time that a bit of reality begins to set in- sort of.
+9 # Billsy 2016-04-30 13:51
Excessive CEO compensation wasn't a problem when tax rates were as high as 90% during the Eisenhower administration. Nor was it an issue when they dropped to 70%. Reinvestment in staff and materials was more attractive than stock buy-backs. Unfortunately, the power elite will fight any change to the tax rates until we disenthrall ourselves from this notion that wealthy financed campaigns like Clintons are acceptable. It greatly frustrates me that so many voters refuse to understand that the Sanders candidacy is chiefly about rejecting the corrosive effect of wealthy campaign financing. They focus on platitudes and personality at th expense of political expediency. Issue number one remains overturning the dreadful Citizens United decision and limiting campaign financing to public funding. Imagine if you will, political campaigns that can last only 4 months or less as they exhaust their funding. But I'm dreaming.
+3 # AlexG 2016-04-30 19:18
Robert Reich's new personal ID photo now looks distinctly sad-faced -- even disgusted, possibly due to his late-coming, reluctant re-acknowledgem ent of exactly that greed-ruinous flaw in human nature, which all but a tightly-regulat ed capitalism allows to inevitably flourish and destroy society-by, otherwise.
Reich is certainly no intellectual featherweight; and, despite his onetime, alliance with crypto-right winger, Bill Clinton, has always tried to speak and act from: i.e., his probably-sincer ely-held beliefs in Enlightenment-o riented principles of political economy, summarized thus: the greatest good for the greatest number.

After serving under the NAFTA-spouting Clinton, as Sec. of Labor, Reich took a long while to re-gain his integrity, by finally acknowledging the ethical & structural corruption of the current Democratic Party, and then even more-so, most recently, by his openly coming-out for Bernie Sanders.

Who knows: given a bit more time, Reich may next advocate for the rejection of any form of capitalism that is not democratically regulate-able by a reliable,one-pe rson/one vote political system.

Bernie Sanders calls such a political-econo my system: Democratic Socialism; but in fact it has almost zero likeness to any any kind of Leninism, Maoism, or Castroism; and is, really, much more consonant with the kind of system that Adam Smith, a great opponent of plutocracy and oligarchy in his day, credibly advocated in detail, over 2 centuries ago.

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