Citigroup shareholders voted Tuesday against a planned $15 million pay package for CEO Vikram Pandit. The non-binding vote, required by the Dodd-Frank financial reform legislation, is the first time shareholders at a major financial firm have given a formal thumbs-down to a proposed executive payout, and sends a powerful message to the bailed out megabank’s leadership.
On Morning Joe Wednesday, the gang was all fired up. “Citi is an absolute collosal mess,” said Joe Scarbrough. “They shouldn’t pay this guy 15 dollars.”
Mika Brzezinski called the planned pay package “shameful.”
That led to a discussion of income inequality. Republican political strategist Mark McKinnon presented a chart that showed that in 1990, CEOs made 107 dollars for every dollar made by the average worker. Under President Clinton, that went up to over 500 dollars, then dropped by half under President George W. Bush.
But New York magazine’s John Heilemann pointed out that this had nothing to do with presidential policies. “The chart is tracking the stock market,” he said. “CEO pay is tied largely to the performance of the companies stock prices.”
Scarborough wanted to make a broader point – that tectonic decades-old shifts in the global economy have been driving the growing gap between rich and poor.
“It has to do with technology, it has to do with the IT revolution, it has to do with the fact that you don’t have bank tellers anymore, it has to do with the fact that you don’t have 20 people in dry cleaners,” he said. “Until we get our arms around this fact and stop trying to point at a Republican president or a Democratic president, we’re not going to understand that this is a trend that goes back to the early 1970s.”
Heilemann agreed. “It’s being driven by the fact that there’s increasing returns to smarts,” he added. “The combination of technology and globalization means that the smarter you are, the better educated you are, the more money you make. And that’s happening across the developed and under-developed world … These are big forces: globalization, the information revolution. These are big huge forces, presidents do not control them.” That doesn’t mean we can’t do anything to address inequality. “There’s still an argument for tax fairness,” Heilemann said. “You can make that argument. But you’re not going to change the tidal forces of the global economy by moving the top tax rate from 35 to 39 percent.”
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