Sometimes "redistribution of wealth" gets mentioned in conjunction with some ongoing federal deficit discussions. However, no remedy for earnings disparities has yet emerged.
As of this writing, it appears that tax cuts for the rich could even be extended while New York might allow its "millionaires surtax" to expire.
Meanwhile, our business tycoons remain primary targets of criticism -- perhaps for a reason.
A recent Institute for Policy Studies report noted that, since the economic crisis began, firms with the most layoffs boosted corporate profits. Fifty companies cut 531,000 jobs between November 2008 and April 2010 -- with executive bonuses averaging $12 million.
Recent increases to Transocean Ltg. executives raised some questions because of the reason they were granted.
They were based on the "best safety performance year" in the history of the company. This, despite an explosion last April on a company oil rig which killed 11 and spilled an estimated 200 million gallons into the Gulf of Mexico!
The CEO reportedly received a total bonus of $374,062. Wow! Notably in contrast was Berkshire Hathaway's Warren Buffett who received only $100,000 -- for a 30th straight year. However, he happens to be the company's largest shareholder with a worth of about $50 billion, most reportedly is pledged to charity.
There may be a little hope for the future because a significant door to boardroom compensation decisions recently opened. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 now allows shareholders to cast advisory votes at general meetings.
Although nonbinding, the "say-on-pay" votes cast might influence members to restrain growth of executive salaries. Recently, Hewlett-Packard shareholders voted against compensation packages proposed for their top executives.
I also noted a few administrative cost-cutting suggestions within shareholder meeting packets.
One only encouraged shareholders to receive their meeting materials by electronic means rather than by mail. The rationale was that natural resources would be preserved and costs of printing and mailing reduced.
Although the environmental objective was appropriate, no other meaningful cost-saving proposals were noted.
The chairman, president and CEO failed to propose any reduction in the standard array of executive perquisites to address major costs of management. Maybe this was just an oversight?
Meanwhile, new IRS regulations have been imposed on top officials of tax-exempt 501(c)(3) and 501 (c)(4) organizations.
The IRS is now allowed to impose penalties on execs receiving "excessive compensation" in "not-for-profit" organizations. The central issue seems to be whether or not certain compensation may constitute an "excess benefit".
Seven-figure compensation paid to some American Association of Retired Persons (AARP) executives has been questioned. The social welfare organization's public policy segment represents interests of about 40 million members.
Last year, cash flows of about $10 billion were generated from businesses bearing the AARP name. These include group health, mail order pharmacy, mutual funds, homeowners and auto insurance plans. Insurance sales represented the single largest revenue source.
The organization's business revenues might have yielded more than $9 million in taxes if federal income taxes were applied. However, there were none because AARP holds a federal tax exemption.
This status also qualifies AARP mailings for a nonprofit postal bulk rate. This reduced rate represents an estimated $14 million loss to the U.S. Postal Service annually -- likely made up by taxpayers.
Many athletes and entertainers also receive hefty compensation. These include performers, producers and executives in music, film, recording or related occupations. However, lacking a Wall Street taint, they manage to avoid much criticism.
Clearly, no ready solution now exists to resolve perceived wealth disparities. So, maybe an admittedly simplistic solution could be considered.
How about lobbying now for legislation upgrading the status of shareholder votes from "advisory" to "binding?" Couldn't this stimulate a flattening of executive compensation growth, possibly reduce management costs over time and level the wealth playing field a bit? Isn't this at least worth a shot?
Paul Cooper is a Pleasant Hill resident, and former mayor and member of the Pleasant Hill City Council. Contact him at firstname.lastname@example.org.