As Labor Strife Grows, So Do Complaints About CEO Pay
Elon Musk has apparently had enough of automotive companies showering their executives with lavish compensation packages.
The Tesla CEO, himself under investigation by the Securities and Exchange Commission for asking the electric-vehicle manufacturer to build him a glass house, took issue earlier this month with the news that competitor Lucid Motors paid its chief executive $379 million in 2022. As has been the case with Musk in recent years, Lucid’s Peter Rawlinson made a windfall in 2022 from stock rewards based on market metrics. Yet no irony was detected in Musk’s warning: “Beware any company where leadership compensation is not linked to performance.”
You probably won’t see Musk on picket lines in solidarity with the members of the United Auto Workers currently on strike. However, his comments on executive compensation shined a spotlight on a hot-button issue in a year filled with labor strife.
When discussing the rationale behind the ongoing strike, the UAW has hammered home the point that CEOs of auto companies are banking some hefty paychecks. During a recent interview on Face the Nation, UAW President Shawn Fain cited trends in CEO pay as the justification behind workers’ demand for a 40% wage increase.
Although the carmakers might contend the union is inflating the growth of their chief executives’ pay packages, there’s no disputing that the people in the C-suites at companies such as Ford and GM are taking home hundreds of times the amounts of their average employees. Don’t mistake the grievances over executive pay and perks as an auto-only issue, though. Take the latest unrest at aerospace company Boeing. Rich Plunkett, an official with the Society of Professional Engineering Employees in Aerospace, summed up the mood of Boeing employees recently in a choice quote offered up to The Wall Street Journal: “People are pissed they’re being told to get their butts to the office.”
Primarily, Boeing’s workers seem to be taking umbrage with directives to work in-person on tasks that could be done remotely. That likely wouldn’t be seen as such a big ask if the company wasn’t going to extreme lengths to accommodate the working arrangements of its executives. While he has yet to relocate to Boeing’s new headquarters in Arlington, Virginia, CEO David Calhoun has made frequent use of the company’s private jets over the last three years to shuttle him to and from his residences in New Hampshire and South Carolina, according to the WSJ. Meanwhile, Boeing has opened a satellite office in Connecticut located near the residences of its CFO and treasurer.
Fain is couching the current dispute between his union and the auto companies as a matter of “greedy CEOs” offering workers “poverty wages.” It’s a familiar theme throughout the history of the labor movement, but it does resonate with the public. Note that President Joe Biden is heading to Michigan this week to walk the picket line with UAW members. His likely opponent in the 2024 presidential election, Republican Donald Trump, plans to address autoworkers a day later in Detroit. Bottom line: Don’t expect the uproar over CEO compensation to die down anytime soon.
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