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UNI Global Union will tell CEO’s assembled at the annual World Economic Forum in Davos, Switzerland, that the global recession is not an excuse to take more money out of workers’ pockets and that their pay packets and lavish spending is unethical and unsustainable.



UNI General Secretary Philip Jennings will be in Davos today at a critical session on CEO pay, entitled “Rethinking Compensation Models”.



“As the global economy makes a slow recovery after the worst recession since the Great Depression, decision makers must put the economy on a sustainable footing,” said UNI General Secretary Philip Jennings. “The important lesson to be learned is that working people bailed out the financial system and that has enabled the recovery to take place. Now we expect a shift from market fundamentalism to a new era of social responsibility on everything ranging from business values to CEO pay.”



Jennings says that CEO pay should not exceed 20 times the median income in a company.



The US banking industry is a prime example of bloated pay packages that have enriched executives while working people have suffered and that a sense of entitlement has taken hold so that bankers are spending as much money as they can to ensure that the government does not impose any limitations on the way they make and spend their money.



A recent study from the International Monetary Fund (IMF) reveals that in the US banks that spent the most money on lobbying the government were the biggest risk takers and the worst performers. The IMF report found that the banks that lobbied the most had the most lax lending standards and the fastest growing mortgage loan portfolios.



The top executives at those banks have a personal incentive to maximize risk that goes straight to their pocketbook. A report from the Institute for Policy Studies found that “from 2006 through 2008, the top five executives at the 20 banks that have accepted the most federal bailout dollars since the meltdown averaged $32 million each in personal compensation.”



A few decades ago, the IPS report said, CEOs usually took home about 30 or 40 times that of a worker but in 2008 top executives on average scooped up a whopping 319 times more than the average U.S. worker.



A ruling last week from the US Supreme Court that allows corporations to spend as much money as they want in elections now makes the playing field even more unequal.



Corporations can now spend millions in the US to try to ensure that they are free to behave as they choose without any regulatory oversight.



Jennings said the global union movement is united in its quest to fight this trend around the world.



“Davos cannot be turned into a place where companies feel comfortable returning to business as usual and the Global Unions will be fully engaged in pushing for fundamental changes in the world of business and finance,” Jennings said.



Jennings will be part of a delegation from the Global Union Federations and the International Trade Union Confederation (ITUC).



He also joins Shumeet Banerji, Chief Executive Officer of Booz & Company, Mark Mactas, President and Chief Operating Officer of Towers Watson, Stephen G. Pagliuca, Managing Director of Bain Capital, and Peter A. Weinberg, Founding Partner of Perella Weinberg Partners on the panel on executive compensation in Davos. The panel will be moderated by Adi Ignatius, Editor-in-Chief of the Harvard Business Review.



The ITUC has put out its own statement on the World Economic Forum here



UPDATE:

After the presentations, the panellists were asked why CEOs today make so much more money than their workers compared to the earnings gap 50 years ago.



Jennings said, and the panel agreed, that CEOs have manipulated the corporate compensation system by jacking up their earnings to hundreds of times of the average worker.



Jennings refused to accept the other panellists’ contention that it was too complex to find a reward system to align shareholder value, CEO pay and fair worker compensation.



“Workers face a flat “no” to wage increase,” Jennings said. “The double talk has to stop and we should say “no” to these outrageous CEO pay structures.”