Union blasts banking CEO pay
Published April 14, 2008 by CSBJ Staff
The Associated Press
The AFL-CIO says “outrageous” pay packages for banking industry executives are partly to blame for the credit crisis, encouraging risky investment strategies that ended up hurting shareholders and consumers.
The labor federation, a major shareholder in public companies through union-sponsored pension funds, made the critique as it unveiled the 2008 version of its “Executive PayWatch” Web site, which includes a CEO compensation database.
“This year’s site drives home how outrageous CEO pay isn’t just a moral issue for America’s working people – it’s a financial one, too,” AFL-CIO Secretary-Treasurer Richard Trumka said in a statement. “When CEOs are paid obscene amounts to make bad decisions, it hurts average Americans who hold mortgages, have bank accounts and who are invested, such as through their pensions.”
The union’s leaders argued that executive-pay packages are too-often linked to short-term measures of performance, such as revenue growth, that can mask potentially catastrophic risks taken by the company.
Filed under Banking and Finance, CSBJ Daily