Corporations spent billions to counterpoint buyers and executives as employees might barely afford lease for a one-bedroom condominium.
The median employee at Lowe’s, the house enchancment retailer, made simply over $29,580 final yr — not enough to comfortably afford a modest one-bedroom rental house in the US.
However the firm was hardly cash-strapped in 2022. In line with a report launched Thursday by the Institute for Coverage Research (IPS), Lowe’s spent greater than $14 billion on inventory buybacks that yr, offering an artificial boost to the corporate’s share worth and further enriching rich buyers and executives.
If Lowe’s had as a substitute opted to make use of that money to the good thing about its staff, each one of many company’s U.S. employees might have acquired a $46,923 bonus, IPS calculated.
Lowe’s is a part of a gaggle of corporations that IPS calls the Low-Wage 100, which incorporates the S&P 500 companies with the bottom median employee pay final yr.
Between January 1, 2020 and Could 31, 2023, Lowe’s and different Low-Wage 100 companies spent $341.2 billion on inventory buybacks. Lowe’s, whose CEO noticed whole compensation of $17.5 million final yr, has spent essentially the most of any Low-Wage 100 firm on buybacks over the previous three years, adopted by Dwelling Depot, Walmart, and S&P International.
The typical CEO-to-median-worker pay ratio at Low-Wage 100 corporations final yr was 603 to 1, and the highest executives of the low-wage corporations benefited straight from final yr’s splurge on inventory buybacks, which improve shareholders’ possession stake.
“The CEOs of the 90 Low-Wage 100 corporations which have spent funds on buybacks personal roughly $14.9 billion value of their firm inventory,” the IPS report notes. “On the 65 buyback corporations the place the identical particular person held the highest job between 2019 and 2022, the CEOs’ private inventory holdings soared 33% to a mean of $184.7 million. Median pay at these companies rose solely 10% to a mean of $31,972. These figures don’t mirror inflation as a result of the median pay figures cowl a world workforce.”
IPS discovered that 51 of the businesses within the Low-Wage 100 — together with Amazon, FedEx, and Johnson Controls — acquired a mixed $24.1 billion value of federal contracts between fiscal years 2020 and 2023, probably giving the federal authorities leverage to pressure the businesses to rein in out-of-control government compensation and inventory buybacks.
As a part of a menu of proposed coverage options, IPS urged President Joe Biden’s administration to present federal contractors that don’t repurchase their very own shares precedence within the awarding of subsidies and grants, a transfer that may construct on a policy the U.S. Commerce Division enacted final yr for semiconductor subsidies.
The group additionally known as on federal lawmakers to move laws to impose greater taxes on corporations with yawning gaps between CEO and employee pay. In 2021, Sen. Bernie Sanders (I-Vt.) proposed a invoice that may have hiked taxes on giant firms that pay their high executives over 50 instances greater than their median employees.
“Policymakers might do far more to slim the divides — together with by way of government motion,” mentioned Sarah Anderson, director of the IPS International Financial system Mission and writer of the brand new report. “President Biden ought to wield the facility of the general public purse to push all company recipients of taxpayer cash to slim their pay gaps, cease losing cash on buybacks, and respect employee rights.”
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