CEO’s Paychecks Getting the AFL-CIO Mad; Americans Didn’t Whip Out Their Wallets Much in April; In: DuPont Proxy War, Out: Boxing

So what’s the problem?

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

The AFL-CIO is all worked up about CEO salaries and just how disproportionately higher they are than everybody else’s. The organization came out with a new report detailing all the juicy numbers found in an average CEO’s salary and the insane wage inequality crisis that goes along with it. AFL-CIO President Richard Trumka said, “America faces an income inequality crisis because corporate CEOs have taken the raising wages agenda and applied it only to themselves.”  CEO’s apparently rake in an average of $13.5 million a year, about $37,000 a day and a whopping 373 times more than the average worker, who gets a very average $36,000 a year. That $13.5 million figure is, by the way, a 16% increase over the previous year. But when a company starts increasing wages, it decreases profit for the company, which poses quite the dilemma for a company like say, Wal-Mart, with whom the AFL-CIO took particular issue. Wal-Mart’s CEO, Doug McMillon, gets about $20 million a year, according to the AFL-CIO’s report. However, Wal-Mart adamantly disputes that number since 75% of his paycheck is based on reaching his performance goals – which he did not – and hence, received less. Like maybe a couple of million less. According to other statistics, of the 250,000 CEO’s in the nation, the average pay is closer to $180,000.

Speaking of money…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Americans didn’t show the money in April, according to the Commerce Department, at least for cars, furniture, department stores…well, you see where I’m going with this. Some find this a bit unnerving since spending accounts for 70% of the economy. In fact April’s spending flatline is surprising considering all the steady hiring gains we’ve been seeing in the last twelve months, not to mention the 3 million jobs added that pay people money which they presumably were not inclined to spend. Even March saw a 1.1% increase in spending. April’s digits might have been worse had it not been for gains in restaurants, apparel and online spending offsetting those decreases in other areas. So what gives? Analysts aren’t too concerned since finding gainful employment hasn’t been a problem, a fact which tends to calm everybody’s nerves. Except paychecks don’t seem to be getting fat enough (see previous item) which does put a crimp on those spending figures.

Them’s fightin’words…

Image courtesy of Boians Cho Joo Young/FreeDigitalPhotos.net

Image courtesy of Boians Cho Joo Young/FreeDigitalPhotos.net

Boxing is so over. But some real fighting took place in the Delaware boardroom at DuPont where a months long proxy war took center stage and made Pacquiao vs. Mayweather look like a “Golden Girls” rerun. A clear and decisive winner emerged and it was NOT Nelson Peltz’s Trian Fund Management Fund. The activist investor had four nominees up for board positions but not even one scored a coveted spot. Ouch. Trian started it all back in January, with activist investor Nelson Peltz’s big dreams, and real plans too, to split DuPont into two different parts. CEO Ellen Kullman, along with many other in DuPont’s management, did not particularly care for Mr. Peltz’s idea, feeling it would basically destroy shareholder value. Apparently, they weren’t the only ones who shared this sentiment and hence won the war. This time, anyway. But Trian still has a 2.7% stake in the company which is worth about $1.8 billion so despite the epic loss, Nelson Peltz probably won’t be going away too quickly. In a statement, the company said “We are proud of the role we played as a positive change agent at DuPont. The vote was close. … We will continue to closely monitor DuPont’s performance.” Awkward.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s