Ticketmaster isn’t just crappy to its customers and to the musicians whose shows it manages ticket sales for.
As a dominant event middleman, it tacks on hefty fees and has the effrontery to call them “convenience charges.” And bands complain that by the time parent company Live Nation Entertainment deducts its many cuts for their shows, they’re left struggling to survive while others profit from their work.
Turns out, Live Nation also pays its employees poorly while paying its CEO, Michael Rapino, like a pharaoh. In 2022, the median Live Nation employee earned just $25,673, while Rapino hauled in a tidy $139 million, or more than 5,400 times as much as the employee who fell in the middle of his company’s income distribution, according to a report that was released today.
The findings were part of the 29th annual “Executive Excess” report by the Institute for Policy Studies, a progressive Washington, D.C. think tank. While companies complained about the lack of available workers during the pandemic, this year’s report says that for at least 100 corporations, executives managed to keep worker pay down while giving themselves huge raises.
“In response to strikes and union organizing drives, corporate leaders routinely insist that they simply lack the wherewithal to raise employee pay,” the report said. “And yet top executives seem to have little trouble finding resources for enriching themselves and wealthy shareholders.”
The report said that in the case of Live Nation, the company wants investors to know that the situation isn’t as unfair as all that. If you take into account the fact that most of the company’s employees are part-time and and set them aside — and if you set aside a mammoth payment Rapino received in 2022 — the CEO only made 350 times as much as his median-paid, full-time worker did.
“In its (U.S. Securities and Exchange Commission) proxy statement, the company takes great pains to point out that if you nix the CEO’s $109 million stock grant and all of the company’s primarily part-time employees from the calculation, the Live Nation pay ratio would be merely 353 to 1,” the report said.
The mechanism CEOs have often used to boost their pay over the past few years has been the stock buyback. Instead of reinvesting profits in research, equipment or in rank-and-file employees, companies often use a hefty chunk of that money to repurchase shares of company stock — which increases the value of those shares and those that remain outstanding.
Companies say they do stock buybacks to consolidate ownership, stabilize stock prices or return value to shareholders. But by happy coincidence, the executives deciding to do the buybacks are often huge shareholders in their companies because much of their compensation is in the form of company stock.
In other words, when company leaders undertake stock buybacks, they’re usually giving themselves big raises.
The huge, plutocrat-friendly Trump tax cuts in 2017 sparked a wave of stock buybacks that seems to have continued through 2022. But while they boosted executive pay, at least in the early going, the average worker saw little benefit.
In fact, workers’ share of corporate income continued its decades-long slide — while executives were lavishly rewarded for enacting mass layoffs and keeping down workers’ pay.
The Institute for Policy Research report compiled a list of the “Low Wage 100” — the 100 firms listed on the S&P 500 who paid the worker that fell in the middle of their pay range the least. When the researchers looked at this group, they found that it bought back $340 billion worth of stock in 2022 and their CEOs’ stock holdings increased at three times the rate of their median workers’ pay.
At the top of the buyback list was home-improvement mega-store owner Lowes, which bought back $35 billion in stock. While its median employee made just less than $30,000 in 2022, CEO Marvin Ellison made $17.5 million, the report said.
While many workers for Low Wage 100 companies effectively subsidized their CEOs’ gargantuan salaries with under-compensated work, employees with half those companies were also subsidizing them with their federal tax dollars.
Fifty one of the companies received a combined $24 billion in federal contracts between fiscal years 2020 and 2023. During the same period, those companies engaged in $160 billion worth of stock buybacks, the report said.
Amazon was the biggest in the group, getting more than $10 billion in federal business, much of it for classified work for the National Security Agency and the Department of Defense. As it did, Amazon’s top corporate leadership has done quite well.
“Under CEO Andy Jassy’s two years at the helm, Amazon has spent $5.9 billion on stock buybacks, an outlay that has helped inflate Jassy’s personal stock holdings to $265 million,” the report said. “These millions do not include the bulk of his 2021 mega-grant, a reward that will vest over 10 years.”
There have been steps taken to address the interconnected problems of stock buybacks, skyrocketing executive pay and depressed wages.
As part of the 2022 Inflation Reduction Act, Congress passed and President Biden signed a 1% excise tax on buybacks and Biden proposed raising it to 4% in this year’s State of the Union address.
The Department of Commerce also plans to give preference for subsidies under the CHIPS Act to semiconductor makers who don’t engage in buybacks, the Institute for Policy Studies report said.
