The AFL-CIO is accusing some of the nation’s largest companies of juicing executive pay with cheap stocks as the COVID-19 pandemic erupted, even as they proclaimed they were cutting salaries.
The AFL-CIO offered Abercrombie & Fitch as an example.
In April, the company announced it would cut executive pay from 10 percent to 33 percent as it furloughed workers.
But CEO Fran Horowitz received 240,701 restricted stock shares two weeks earlier, which amounts to almost triple the amount of stock she received the prior year.
The value of the extra stock based on late March stock prices covers around 20 percent of her 2019 salary. The company’s stock price has not recovered substantially since March, however.
The Hill has reached out to Abercrombie and Fitch for comment.
AFL-CIO Deputy Director for Corporations and Capital Markets Brandon Rees says that similar “shenanigans” took place at other companies.
“The COVID-19 related CEO pay shenanigans, where CEOs took symbolic salary cuts to their cash salaries, at the same time receiving equity awards, will not show up until the proxy statements, because the proxy filings are retroactive,” he said.
“We’re not going to have the full picture of CEO pay in the covid economy until 2021.”
The accusations came as part of the union’s annual report on executive pay, which found that average executive compensation for S&P 500 companies had risen to $14.8 million in 2019, 264 times the median salaries in those companies.
The $300,000 executive pay increase last year, before the pandemic hit, amounts to around 2 percent more than in 2018, which was actually slower than the increase in median salaries.
The CEO-to-worker pay ratio the previous year was 287 to 1.