A central argument of the UAW: If Detroit’s Big Three automakers have increased CEO pay by 40% over the past four years, workers should get similar raises.

President of the United Auto Workers Sean Finn That figure was cited multiple times and compared to the 6% pay raise autoworkers received since their last contract in 2019. He opened negotiations for a 40% salary increase over four years, along with the return of pensions and costs. Life increases. Since then, the UAW has lowered its salary increase request to 36%, but the two sides still have great differences in contract negotiations. trigger a strike.

Fein’s focus on CEO pay is part of an increasingly bold trend by unions, citing the wealth gap between workers and top bosses to boost demand for better pay and working conditions. In June, Netflix shareholders rejected an executive pay package in a non-binding vote, just days after the Writers Guild of America wrote a letter urging investors to vote against the pay proposal, saying it would be risky amid an ongoing writer’s strike in Hollywood. is inappropriate. The WGA has written similar letters targeting executive compensation at Comcast and NBCUniversal.

Fein pushed back against the idea that big union wage hikes would drive up auto costs and leave the Big Three automakers — General Motors, Ford and Strantis (formerly Chrysler) — struggling with lower labor costs. at a disadvantage compared with its foreign competitors. The race to transition to electric vehicles.

“Car prices have gone up 30 percent in the last four years. Our wages have gone up 6 percent, CEO salaries have gone up 40 percent. Shareholder dividends are in the billions. So our wages are not an issue,” Fein recently told The Associated Press Said during the interview.

CEO pay has been soaring for decades while wages for rank-and-file workers have lagged. But did the Big Three CEOs really get 40% raises? not completely.

“I don’t know where that 40 percent comes from,” GM Chief Executive Mary Barra said at a new conference when asked whether the UAW’s number was accurate.

Calculating executive compensation is complex because much of it comes in the form of stock grants or stock options. A closer look at the pay packages at these three companies shows that the UAW’s claims are either overstating or underestimating reality, depending on one’s perspective.

Three major CEO compensation packages

Barra, the only one of three people to hold the position since 2019, is the highest-paid, with a pay package worth $28.98 million through 2022. The largest component is a $14.62 million stock grant that will vest over three years and whose ultimate value depends on stock performance and other metrics.

Her pay has increased 34% since 2019, according to public filing data analyzed by Equilar for The Associated Press.

Ford CEO James Farley’s total compensation for 2022 will be nearly $21 million, a 25% increase from then-CEO William Clay Ford’s $16.76 million in 2019. Farley’s compensation last year included $15.14 million in stock awards that also vest over three years with an ultimate value contingent on performance.

Where things get more complicated is Stellantis, which was formed in 2021 from the merger of Italian-American conglomerate Fiat Chrysler Automobiles and France’s PSA Peugeot Citroën. Because it is a European company, Stellantis discloses executive compensation much differently than GM and Ford.

Stellantis said in its annual remuneration report that CEO Carlos Tavares’ compensation for 2022 would be 23.46 million euros. This is an increase of nearly 77% from Fiat Chrysler’s then CEO Mike Manley’s 2019 salary of 13.28 million euros.

The UAW calculated that CEO pay at the three automakers has increased a combined 40.1% since 2019, based on methodology the UAW provided to The Associated Press.

But there’s a catch: Stellantis’ numbers reflect “realized compensation,” which includes the value of previously vested equity that vested during the reporting year. In contrast, U.S. companies use the grant date value of stock packages awarded to executives during the reporting year.

In its analysis, Equilar conducted an equivalent comparison of the three CEOs using a “grant date” method. Calculated according to this standard, Tavares’s salary in 2022 will be 21.95 million euros, including 10.9 million shares for three years.

According to Equilar, this is actually a 24% drop from Manly’s 2019 pay package (€29.04 million).

CEO pay volatility

So, is Tavares really making less than Manley did four years ago? Not really.

That’s because in some years, talking about a CEO’s “real pay” can obscure an exorbitant pay package approved by a company’s board of directors.

Take Tavares’ 2021 remuneration package, for example, which includes a special bonus of €25 million in cash as well as shares worth €19.56 million – all subject to long-term performance targets – awarded in recognition of Tavares Si’s “important role” in leading the company. Companies go through mergers.

This one-time bonus alone, combined with millions of dollars in regular compensation, makes Tavares’ 2021 compensation package significantly higher than Manley’s 2019 salary.

Stellantis shareholders rejected the remuneration proposal with 52.1% of the vote at the annual meeting, and although the vote was advisory only, the board approved his plan.

GM and Ford CEO compensation packages also peaked in 2021 before declining slightly in 2022.

How does this all compare to the wages of the average worker?

No matter how you slice the numbers, the gap between CEO pay and the average worker at these three companies is huge.

At General Motors, the median worker wage in 2022 will be $80,034. It would take the worker 362 years to receive the annual payment of Bala.

At Ford, the media pays $74, 691, which takes 281 years.

At Stellantis, where the median salary is €64,328, that would take 365 years, although the company noted in its annual report that the gap included costs related to Tavares’ one-time grant. Excluding this, the salary ratio is 298:1.

How extreme is this gap? It depends on the comparison.

That’s much higher than the typical pay gap at S&P 500 companies, which is 186:1, according to the Associated Press Annual CEO Compensation Surveywhich uses data analyzed by Equilar.

By historical standards, this is an astronomical figure. According to a study of the 350 largest public companies in the United States by the left-leaning Economic Policy Institute, the CEO-to-employee pay ratio was just 15:1 in 1965.

Automakers stress that their foreign competitors pay workers much lower wages. Including benefits, workers at Detroit’s three automakers make about $60 an hour, said Harry Katz, a Cornell University labor professor. For foreign automakers with factories in the United States, salaries are about $40 to $45.

Then there’s Tesla.

The company’s proxy statement shows CEO Elon Musk will receive zero compensation in 2022, making its official pay ratio meaningless. Of course, that’s because Tesla hasn’t offered Musk a new compensation plan since its 2018 long-term compensation plan, which could be worth more than $50 billion and is facing legal challenges from shareholders.

But the proxy offers a glimpse into the incredible wealth disparity between its workers and one of the world’s richest men.

The documents show that Musk’s “realized compensation” in 2021 totaled more than $737 million. That year, the average Tesla worker earned $40,723.

According to the power of attorney, it would take more than 18,000 years for this worker to receive Musk’s “realization compensation” that year.


AP Auto Writer Tom Krishnar in Detroit contributed to this report.


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