Corporations will no longer be able to hide how much CEOs are paid compared to the workers who make those companies run, under a rule proposed today by the U.S. Securities and Exchange Commission (SEC). The rule requires companies to disclose the ratio of total compensation between chief executive officers and the median pay of employees.

That new rule does far more than help point out the historic and growing massive gap between CEO and worker pay. It is an important tool for investors to judge a company’s internal compensation structure, says AFL-CIO President Richard Trumka.

We're told that corporate executives get paid outrageous sums of money because they add value to the companies they work for. But a new video and report from the Institute for Policy Studies (IPS) show that this is far from accurate. Of the 500 highest-paid CEOs of the past 20 years, the report shows, 112 of the companies they represent filed for bankruptcy or received bailout money from the federal government, 39 of the CEOs were fired and 39 of those companies had to pay massive fines or settlements for serious fraud—a total of nearly 40% of all the the highest-paid executives.

CEOs Recovering Well, Workers Not So Much originally appeared on the Economic Policy Institute (EPI) blog. 

Escalating CEO compensation is a major contributor to income inequality. Along with financial sector pay, growing CEO compensation has helped more than double the income share of the top 1 percent over the past three decades. Moreover, the fact that CEO pay has risen so quickly since the end of the Great Recession is an indicator that the top 1 percent is doing far better than ordinary Americans in the recovery.

In case you missed it, The New York Times published two articles last weekend that captured the dramatic disparity between workers’ wages and executive pay at large corporations across the country. While median working family incomes fell last year, median CEO and executive compensation skyrocketed and lucrative executive retirement packages continued to expand. These lucrative plans, known as “Golden Parachutes,” have increased despite years of public outcry as companies have chipped away at workers’ pensions and retirement plans. At the same time, a coalition of CEOs and corporations are advocating cuts to earned Social Security and Medicare benefits as they rake in lavish retirement and bonus packages.

A new Bloomberg article notes that the CEOs of the Standard and Poor's 500 corporations make 204 times as much money as their own employees. The article highlights the most extreme disparity in the S&P 500, where former J.C. Penney CEO Ron Johnson received a total compensation package 1,795 times that of former fashion jewelry saleswoman Rebecca Gonzales in 2011.

Next time you write your tax check to the Internal Revenue Service, imagine which multibillion-dollar corporation may get some of your hard-earned pay.

How about drugmaker Abbott Laboratories, which in 2011 claimed a $586 million tax refund for its 64 subsidiaries operating in 16 countries considered tax havens?

Or maybe Chesapeake Energy, a company that last year made $2.8 billion in pre-tax U.S. profits—but whose effective tax rate over the course of its 23-year history has averaged only about 1 percent?

Braving record heat and dangerous midwestern summer thunderstorms, groups of 15 members from the Machinists (IAM) Local 851 take four-hour shifts every day picketing the gates of the Caterpillar factory in Joliet, Ill. This is their 12th week on strike after Caterpillar, which made $4.9 billion in profits last year, demanded the nearly 800 workers accept a six-year wage freeze, doubled health care premiums and cuts to pensions. What do you think about Caterpillar making record profits and demanding its workers take a six-year pay freeze?

Members of the 99% Power coalition disrupted Verizon's annual shareholder meeting in Huntsville, Ala., six separate times today. In each instance, a group of protesters interrupted the proceedings using “Mic Check” tactics, followed by chants such as “Shame on you!” “Verigreedy!” and “People over profit!”  After each occurrence, the chanting group was led out by security people, with many in the audience applauding them. There were no arrests.

Thousands of working families are gathering outside the Verizon shareholder meeting this morning in Huntsville, Ala., to protest the company's "VeriGreedy" treatment of customers, workers and taxpayers.

Even as Verizon tripled the compensation of CEO Lowell McAdam to $23.1 million last year, the corporation was outsourcing U.S. jobs, gutting worker pensions and charging current and retired employees and their families thousands of dollars more for health benefits while cutting disability coverage. Meanwhile, employees have been struggling to win a new contract for nearly a year.

Citing our 2012 Executive PayWatch website—CEO Pay and the 99%—the Pittsburgh Post-Gazette, in an editorial today, says:

Income inequality is spawning deep divisions in America, and this is one problem that starts at the top.