CLASS WAR
As UAW, Detroit 3 fight over wages, here's a look at autoworker pay, CEO compensationEric D. Lawrence and Jamie L. LaReau,
USA TODAY
Wed, September 20, 2023
Wages have been a big point of contention in ongoing UAW talks, with the union initially seeking a 40% pay increase and the automakers offering about half that percentage over the life of the next contract in their most recent proposals.
The union has said the wage request is tied to the percentage increase in CEO compensation over the last four years. The union has also pointed to the big increase in inflation, saying autoworker wages haven’t come close to keeping pace.
So what do United Auto Workers members make? A blog post in August on UAW contracts by Kristin Dziczek, a policy adviser at the Federal Reserve Bank of Chicago, put the top hourly production wage for UAW members at $32 an hour. It also put estimated hourly labor costs for the Detroit Three automakers for those workers, including benefits and bonuses, at an estimated $66 per hour this year.
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Wed, September 20, 2023
Wages have been a big point of contention in ongoing UAW talks, with the union initially seeking a 40% pay increase and the automakers offering about half that percentage over the life of the next contract in their most recent proposals.
The union has said the wage request is tied to the percentage increase in CEO compensation over the last four years. The union has also pointed to the big increase in inflation, saying autoworker wages haven’t come close to keeping pace.
So what do United Auto Workers members make? A blog post in August on UAW contracts by Kristin Dziczek, a policy adviser at the Federal Reserve Bank of Chicago, put the top hourly production wage for UAW members at $32 an hour. It also put estimated hourly labor costs for the Detroit Three automakers for those workers, including benefits and bonuses, at an estimated $66 per hour this year.
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Autoworker wages in the US
The Bureau of Labor Statistics puts the average hourly wage rate for all production and non-supervisory autoworkers in the United States at $27.99 per hour as of August. Hourly labor costs, including benefits and expenses, at non-union plants operated by Tesla and foreign transplants are also less than at the Detroit Three, from $45 to $55 per hour, according to recent Free Press reporting, a point that the companies tend to highlight.
Not all autoworkers at the Detroit Three come close to the top pay rate of $32 an hour. Temporary or supplemental workers make less. Stellantis, for instance, offered in one of its proposals during ongoing contract talks to raise the starting wage for its supplemental workers from $15.78 per hour to $20 per hour, and the company, which says it needs them to fill gaps caused by absenteeism, has thousands of such workers. Many supplemental workers make around $17 per hour, although the percentage of those making such wages across the industry isn't clear because that information isn't necessarily made public.
For permanent production workers who are said to be "in- progression" to top wages, the union wants to eliminate this so-called tiered system, which dates to 2007. It included lower starting pay and different benefits, such as a 401(k) retirement offering rather than a pension, for workers hired since that time. The range goes from about $18 an hour up to that top rate of $32, according to Marick Masters, a labor expert and business professor at Wayne State University.
Company proposals have included offers to reduce the number of years it takes to reach top pay for these workers from eight years to four. The union would also like to see supplemental workers rolled over to permanent status in a matter of months rather than allowing them to remain in that role for years in some cases.
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Detroit 3 CEO compensation
And as far as compensation to the CEOs − $29 million for GM’s Mary Barra, $21 million for Ford’s Jim Farley and $24.8 million for Stellantis in 2022, as the Free Press recently noted – they weren’t even the highest payout to an individual last year at the companies.
That honor appears to go to Mike Manley, the former head of Fiat Chrysler Automobiles, who pocketed $54.1 million as part of an agreement inked before the 2021 merger that created Stellantis from FCA and Peugeot maker PSA Group. Manley left Stellantis in November 2021 to become CEO of AutoNation.
UNION EXECUTIVE WAGES
At the UAW, President Shawn Fain is expected to make the same amount in annual compensation as his predecessor Ray Curry, according to labor experts.
The UAW constitutional provisions on salaries for executive officers is reported in financial disclosure forms. Based on the 2022 LM-2 financial disclosure, Curry's base compensation that year was slightly over $219,000. If adding in bonuses and other benefits, it showed a total compensation of $267,000.
A spokesman for the UAW would not verify Fain's compensation when asked to do so by the Detroit Free Press.
At the UAW, President Shawn Fain is expected to make the same amount in annual compensation as his predecessor Ray Curry, according to labor experts.
The UAW constitutional provisions on salaries for executive officers is reported in financial disclosure forms. Based on the 2022 LM-2 financial disclosure, Curry's base compensation that year was slightly over $219,000. If adding in bonuses and other benefits, it showed a total compensation of $267,000.
A spokesman for the UAW would not verify Fain's compensation when asked to do so by the Detroit Free Press.
United Auto Workers members strike at the Ford Michigan Assembly Plant on September 16, 2023, in Wayne, Michigan.
This article originally appeared on Detroit Free Press: Autoworker pay? Here's a look at UAW, CEO salaries amid strike
UAW strike puts spotlight on pay gap between CEOs and workers
Khristopher J. Brooks
Wed, September 20, 2023
The United Auto Workers strike has entered Day 6 as union representatives and Detroit's Big Three remain at odds over wage increases.
UAW President Shawn Fain and other union leaders have argued that Ford, General Motors and Stellantis — parent company of Chrysler, Dodge, Jeep and Ram — can afford to pay workers more money because the companies have sharply boosted CEO pay in recent years. Those pay increases have helped create an unreasonably high pay gap between CEOs and average workers, the UAW says.
"The reason we ask for 40% pay increases is because, in the last four years alone, the CEO pay went up 40%," Fain said on CBS News'"Face the Nation" Sunday. "They're already millionaires."
How much does an average UAW autoworker make—and how much do Big Three CEOs get paid?These are the vehicles most impacted by the UAW strikeUnited Auto Workers go on strike against Ford, GM, Stellantis
Ford CEO Jim Farley earned $21 million in total compensation last year, the Detroit News reported, which is 281 times more than typical workers at the company, according to Ford filings with the Securities and Exchange Commission. Stellantis CEO Carlos Tavares made $24.8 million in 2022, according to the Detroit Free Press, roughly 365 times more than the average worker at Stellantis, SEC filings show. GM CEO Mary Barra earned nearly $29 million in 2022 pay, Automotive News reported, which is 362 times more than the typical GM worker.
Not unique to auto industry
While those ratios may seem staggering, they're not uncommon, according to Michael Dambra, an accounting and law professor at University at Buffalo.
"It's right in line with what's been happening in the past three or four years," Dambra told CBS News.
Triple-digit pay gaps between a CEOs and workers are also not unique to the auto industry, Dambra and other experts say.
Back in the '60s and '70s, company executives earned "somewhere between 20 and 30 times" regular employees, but "that's massively increased, particularly in the 2000s," said Dambra.
Factoring in the nation's 350 largest companies, the CEO-to-worker pay ratio was 20-to-1 in 1965, according to the Economic Policy Institute. That figure jumped to 59-to-1 in 1989 and 399-to-1 in 2021, EPI researchers said. The CEO-to-worker pay ratio for S&P 500 firms was 186-to-1 in 2022, according to executive compensation research firm Equilar.
Compensation for CEOs "unlimited"
That pay ratio continues to grow because CEOs are increasingly paid in stock awards. Companies often justify paying CEOs in stock by saying it aligns a corporate leader's financial incentives with the company's — ostensibly, the executive earn more if the company does well or hits certain targets.
But companies often boost CEO pay even when executives miss their targets, the left-leaning Institute for Policy Studies said in a 2021 report that identified 50 large companies that changed their executive compensation rules during the pandemic.
Barra told CBS News last week that 92% of her pay is based on GM's financial performance in a given year. She noted that employees' total pay is also tied to performance through profit-sharing bonuses.
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"The way that General Motors is set up, if the company does well, everyone does well," she said.
Although that may be broadly correct, employees' profit-sharing pay stops at a certain dollar amount, Dambra said, noting the $12,000 cap the UAW and automakers had in their now-expired contract. Barra's pay structure doesn't have a cap, "so essentially compensation for Mary Barra is unlimited," he said.
"As stock performance improves and stock returns go up, the share-based compensation she gets is uncapped — it's exponential, unlimited growth," Barra said.
Khristopher J. Brooks
Wed, September 20, 2023
The United Auto Workers strike has entered Day 6 as union representatives and Detroit's Big Three remain at odds over wage increases.
UAW President Shawn Fain and other union leaders have argued that Ford, General Motors and Stellantis — parent company of Chrysler, Dodge, Jeep and Ram — can afford to pay workers more money because the companies have sharply boosted CEO pay in recent years. Those pay increases have helped create an unreasonably high pay gap between CEOs and average workers, the UAW says.
"The reason we ask for 40% pay increases is because, in the last four years alone, the CEO pay went up 40%," Fain said on CBS News'"Face the Nation" Sunday. "They're already millionaires."
How much does an average UAW autoworker make—and how much do Big Three CEOs get paid?These are the vehicles most impacted by the UAW strikeUnited Auto Workers go on strike against Ford, GM, Stellantis
Ford CEO Jim Farley earned $21 million in total compensation last year, the Detroit News reported, which is 281 times more than typical workers at the company, according to Ford filings with the Securities and Exchange Commission. Stellantis CEO Carlos Tavares made $24.8 million in 2022, according to the Detroit Free Press, roughly 365 times more than the average worker at Stellantis, SEC filings show. GM CEO Mary Barra earned nearly $29 million in 2022 pay, Automotive News reported, which is 362 times more than the typical GM worker.
Not unique to auto industry
While those ratios may seem staggering, they're not uncommon, according to Michael Dambra, an accounting and law professor at University at Buffalo.
"It's right in line with what's been happening in the past three or four years," Dambra told CBS News.
Triple-digit pay gaps between a CEOs and workers are also not unique to the auto industry, Dambra and other experts say.
Back in the '60s and '70s, company executives earned "somewhere between 20 and 30 times" regular employees, but "that's massively increased, particularly in the 2000s," said Dambra.
Factoring in the nation's 350 largest companies, the CEO-to-worker pay ratio was 20-to-1 in 1965, according to the Economic Policy Institute. That figure jumped to 59-to-1 in 1989 and 399-to-1 in 2021, EPI researchers said. The CEO-to-worker pay ratio for S&P 500 firms was 186-to-1 in 2022, according to executive compensation research firm Equilar.
Compensation for CEOs "unlimited"
That pay ratio continues to grow because CEOs are increasingly paid in stock awards. Companies often justify paying CEOs in stock by saying it aligns a corporate leader's financial incentives with the company's — ostensibly, the executive earn more if the company does well or hits certain targets.
But companies often boost CEO pay even when executives miss their targets, the left-leaning Institute for Policy Studies said in a 2021 report that identified 50 large companies that changed their executive compensation rules during the pandemic.
Barra told CBS News last week that 92% of her pay is based on GM's financial performance in a given year. She noted that employees' total pay is also tied to performance through profit-sharing bonuses.
Why are United Auto Workers striking? Here are their contract demandsUAW's Shawn Fain says he's fighting against "poverty wages" and "greedy CEOs"UAW threatens to expand strike to more auto plants by end of week
"The way that General Motors is set up, if the company does well, everyone does well," she said.
Although that may be broadly correct, employees' profit-sharing pay stops at a certain dollar amount, Dambra said, noting the $12,000 cap the UAW and automakers had in their now-expired contract. Barra's pay structure doesn't have a cap, "so essentially compensation for Mary Barra is unlimited," he said.
"As stock performance improves and stock returns go up, the share-based compensation she gets is uncapped — it's exponential, unlimited growth," Barra said.
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