Warren Buffett (worth $58.5 billion) was not joking about winning the class war. Before the Great Recession (in 2006) Warren Buffett had said "they were winning". But in the aftermath of the Great Recession (in 2011) he said "they won".
— while the wealth of the top 0.01% has been exponentially escalating ever since.
So if the top 0.01% had already won the class war back in 2011, what have they been doing since then—massacring their POWs?
The Huffington Post has an informative article noting that one key source of wealth at the very top is the pay of the executives of our largest companies (besides investment income, such as capital gains on stocks). But they go on to explain that CEOs overly generous executive pay packages are approved by the other corporate directors, who are themselves paid for their service. Many of those directors are also executives at other companies, meaning they sit on both sides of the arrangement.
Salaries for top executives and payments to board members are all publicly made available in shareholder reports, annual company statements and SEC filings (look for "investors relations" on their corporate websites). But they have never been displayed in an easy-to-explore way—until researchers at the Center for Economic Policy and Research compiled the data—and The Huffington Post began presenting it as part of a new project that focuses on one major element of income inequality. They're calling it "Pay Pals" (Check it out.)
The inconsistent measures that companies use to disclose CEO pay is the newest battleground in executive compensation. As the Securities and Exchange Commission works on a rule to require pay-for-performance reports, it also plans to end the wide latitude enjoyed by firms when they compute the numbers...The SEC’s rule-making is mandated by the 2010 Dodd-Frank Act. It is one of at least five rules under the law intended to make executive compensation more transparent and aligned with company performance. One rule, nicknamed "say on pay", requires companies to hold non-binding shareholder votes to approve or reject the pay of top executives. Another, proposed in September, requires corporations to report the ratio of the CEO’s pay to the median compensation of all other employees.
Dean Baker, an economist and the head of the Center for Economic Policy and Research, says, "
The directors are supposed to be as aggressive in holding down the pay of the CEOs and top management as management is in holding down the pay of ordinary workers. How many directors have ever asked if they could find a comparably skilled CEO in Europe or China at a fraction of the pay? This never occurs to the directors, because the CEOs are their friends, and you don't treat your friends this way."
From the Huffington Post:
In a recent example of the chumminess of boards and CEOs, JPMorgan Chase's board gave CEO Jamie Dimon a 74 percent raise, in a year when the bank paid more than $20 billion in regulatory penalties.
U.S. Attorney General Eric Holder had thought Dimon and his pay-pals were too big too jail; so what did the bank's board of a directors to do? Gave Dimon a pay raise instead. As TooMuchOnline had recently noted in one of their weekly newsletters: "You rob a bank, you get 20 years. The bank robs you, the CEO gets $20 million."
The Federal Reserve Bank of Richmond President Jeffrey Lacker has said that more work needs to be done to resolve the ongoing threat posed by too-big-to-fail financial institutions. And Eric Holder never mentioned that the banks have been inventing even bigger and bolder scams (A "must read" from Rolling Stone). As an example, here's a list of institutional investors for Apple Inc. And members on those boards of directors often sit on other boards of directors of other major corporations and financial institutions.
For over two years I have made similar complaints regarding the manipulation of CEO stock options and excessive CEO pay—most recently on May 2013, when the economist Jared Bernstein wrote: Apple on the Hill: What Can be Learned from Yesterday’s Hearing. I left this comment:
"When you and others say that the corporate executives of Apple (and others) are only doing their jobs, increasing share value for their stockholders, it should be noted that their largest stockholders are mostly huge institutional investors (banks, private equity firms, and hedge funds) who buy and sell huge blocks of stocks (in the millions of shares). And the senior execs (with their stock options) are usually the next largest shareholders, so they are working for themselves (incentive pay). Also, these same corporate executives often sit on each others board of directors in other companies. So again, they are working to increase share value for themselves (e.g. stock buy backs, etc.)" And then I left this link: Apple is Still Rotten to the Core
On May 24, 2013 on my blog I wrote Apple CEO, Just doing his Job?
The senior execs (with their stock options) are usually the next largest shareholders, so they are working for themselves (incentive pay). Also, these same corporate executives often sit on each others board of directors in other companies. So again, they are working to increase share value for themselves (e.g. stock buy backs, etc.)
On May 10, 2013 at the Daily Kos I wrote We need Guillotines, or a Big Stick
These major business concerns, the multi-national conglomerates with no borders, have no ethical, moral or legal responsibly to the indigenous people or their host governments, but only to their major shareholders (such as the big banks) and the corporate executives themselves (who often sit on each others board of directors). That is just the nature of a limited liability corporation.
On March 21, 2013 I wrote It's Hard to Watch a Rich Grown Man
The CEOs and other executive officers of a company who are awarded with stock options (and bonuses from corporate "pools") --- those who are rewarded for "performance" for increasing the value of stocks for "their shareholders" with increased profits --- are usually themselves the shareholders, along with other institutional investors, such as the big banks, hedge funds and private equity firms (such as Bain Capital); and these same executive officers often sit on multiple boards of directors in each others companies.
On March 20, 2013 I wrote 64 Major U.S. Corporations Only Paid 8.1% in Taxes —and left this as a reply to a comment on that post:
Yes, they are doing their duty to the shareholders, but guess who they are? Big banks, hedge funds and other large corporations. They sit on each others' board of directors, who are themselves shareholders while being paid with stock-options. To say they have an obligation to their "shareholders" is to say they have an obligation to themselves.
On February 15, 2013 I wrote Can we Trust the Social Security Trustees?
Institutional money is deeply tied up in hedge funds, and many are tied to our pensions. But whose interests do the CEOs and other corporate directors really have at heart? How many boards do they sit on simultaneously, and do they sit alongside other directors who are also serving on the same multiple boards?
On November 29, 2011 I wrote Low Wages Kills Jobs, Not High Taxes
Corporations are not in business to create jobs, but profits for shareholders, and their biggest shareholders are the banks, hedge funds, and the corporate executives themselves. They own huge blocks of stocks and the executives often sit on each other's board of directors. When a CEO talks about their noble responsibility of protecting their investors, they aren't referring to little day-trader who has an online account at Charles Schwab or eTrade, they're referring to themselves.
On my website I wrote Tax Advantages for the CEO with Stock Options
Stock options are often said to be granted to an "employee" (but they usually aren't awarded to those who clean the toilets or sweep the floors). Usually the "employee" is really the "boss" --- such as the CEO and other company executives who sit on a corporation's board of directors. They grant themselves (and each other) stock options.
American billionaires, such as Warren Buffett (and other ultra-wealthy major shareholders of the big banks, private equity firms and hedge funds) own the majority of shares in "holding companies" like Berkshire Hathaway, and then buyout other major corporations (or set up shell corporations), that own manufacturing companies with factories in places like China, Cambodia or Taiwan, and then imports their products into the U.S. to sell here—and then keeps their profits untaxed in offshore bank accounts in places such as the Cook Islands, Ireland or Switzerland.
Is that called "American Exceptionalism" or "National Patriotism" when you screw the country that enabled you to become so wealthy and powerful? In my most recent article on February 13, 2014, I wrote American Exceptionalism is Dead, and mention the billions of dollars they spend in corporate buyouts and stock buybacks:
"If these huge corporations aren't buying out other companies, they're buying back their outstanding company shares to increase the value of the CEO's stock options"...
...but they can never afford to pay the majority of their employees a living wage. But yet, there always seems to be more than enough cream at the top for the CEOs and their pay-pals on the board of directors.