CEOs make too much

This article:

“So far in this recovery, corporations have captured an unusually high share of the income gains,’’ said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. ‘‘The US corporate sector is in a lot better health than the overall economy. And until we get a full recovery in the labor market, this will persist.’’

The result has been a golden age for corporate profits, especially among multinational giants that are also benefiting from faster growth in emerging economies like China and India.

As a percentage of national income, corporate profits stood at 14.2 percent in the third quarter of 2012, the largest share since 1950, while the portion of income that went to employees was 61.7 percent, near its lowest point since 1966. In recent years, the shift has accelerated during the slow recovery that followed the financial crisis and ensuing recession of 2008 and 2009, said Dean Maki, Barclays’ chief US economist.

Corporate earnings have risen at an annualized rate of 20.1 percent since the end of 2008, he said, but disposable income inched ahead by 1.4 percent annually over the same period, after adjusting for inflation.

The relentless focus on maintaining margins continues, even though profit and revenue have never been higher; four days after the company’s shares soared past $90 to a record high last month, United Technologies confirmed it would eliminate an additional 3,000 workers this year, on top of 4,000 let go in 2012 as part a broader restructuring effort.

‘‘There’s no doubt we will continue to drive productivity year after year,’’ Chenevert said.

and this:

The nation’s biggest banks wrongfully foreclosed on more than 700 military members during the housing crisis and seized homes from roughly two dozen other borrowers who were current on their mortgage payments, findings that eclipse earlier estimates.

go together with this one:

Swiss residents voted on Sunday to impose some of the world’s most severe restrictions on executive compensation, ignoring a warning from the business lobby that such curbs would undermine the country’s investor-friendly image.

The vote gives shareholders of companies listed in Switzerland a binding say on the overall pay packages for executives and directors. Pension funds holding shares in a company would be obligated to take part in votes on compensation packages.

In addition, companies will no longer be allowed to give bonuses to executives joining or leaving the business, or to executives when their company is taken over. Violations could result in fines equal to up to six years of salary and a prison sentence of up to three years.

If the rich and the corporations continue to take the vast majority of gains in productivity then at some point the rest of us will push back. It seems that time has been reached in Switzerland.

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