Walmart Fails to Disclose CEO to Worker Pay, So We Decide to Help

As part of recent financial reform legislation, Congress ordered companies to disclose the ratio of CEO pay to that of the average worker.  Unsurprisingly, the rule faced serious corporate opposition. The Securities and Exchange Commission, the government agency tasked with enforcing the law, has yet to release a final rule for how the law will be implemented. As a result, 20 members of the U.S. House signed a letter of protest this week demanding that the rule take effect.

According to the letter from Members of Congress, the United States is in the midst of a serious debate about income inequality and its impact on society.    The letter further argues that, despite objections to the contrary, this data should be easy to gather and report for any well-organized company.

Few companies illustrate the reality of inequality like Walmart.    The company has made the Walton family—heirs to the Walmart fortune—the richest family in the world, with a net worth of over $100 billion. Meanwhile, their wealth is being created by a vast number of workers who receive poverty wages and few benefits.     So, since Walmart not yet released information about CEO to worker pay, we thought we would help them out.

Walmart CEO Mike Duke received compensation of $18.7 million in fiscal year 2011.

Walmart Associates receive an average of just $8.81/hour.[1]    At Walmart’s “full-time” status of 34 hours per week, this means an average of just $15,576/year.

This gives Walmart a CEO-to-Worker Pay Ratio of more than 1,200 to 1. Just how unequal is that difference? By contrast, on average, the AFL-CIO’s Executive Paywatch website reported that, in 2010, the average CEO to median worker pay ratio stood at 343 to 1.

And, to get a real sense of the scale of inequality created by the rise of Walmart, we should also compare worker pay to the wealth and income of the Walton family, owners of roughly 50% of Walmart stock .

As we said earlier, 6 members of the Walton family now have more than $100 billion, the first time we’ve been able to find one family in the United States has ever that much money.    And, amazingly, even if we disregard the Waltons’ immense existing wealth and income from other sources, we believe that the family will receive (and we deliberately have not chosen the word “earn”) more than $2.5 billion in dividends from their Walmart stock.

So, instead of 1,200 to 1, the ratio for the Waltons’ annual income to that of the average Walmart worker becomes a breathtaking 161,855 to 1.

“This kind of inequality isn’t right for Walmart and it isn’t right for America,” said, Danny Stauffer, a member of the Organization United for Respect at Walmart.  “It is Walmart Associates who make the company run and who help the Walton family rake in their billions in dividends.   It’s time for the people who help the company run to be treated with respect and dignity.”

 

 

 


[1] IBIS World

What do you think?