Fast-Food CEOs Pocket $660 Million in ‘Performance Pay’

Sarah Berlin

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Fast food workers have organized strikes and campaigns throughout the past year that have drawn attention to the industry's poor wages and subpar working conditions. Workers are beginning to see some successes, and they now have solid research to back up their complaints. Two studies released this week highlight the extreme disparity between fast-food workers' wages and their CEOs' earnings, indicating the broader economic costs of this inequity. In an analysis of U.S. companies, the Demos study found that CEOs of fast-food companies earn some of the highest salaries in the whole economy. Fast-food workers, on the other hand, are the least compensated workers. Demos points out two key problems with the industry's income gap: The most unequal sectors are among those providing the greatest numbers of new jobs in the economy, replacing jobs in sectors with lower income inequality. Income inequality is increasing legal, regulatory and operating risks for fast-food firms. Millions of dollars in legal fees, increasing customer wait times and labor unrest are evidence of the systemic problems of income inequality in fast food. The Institute for Policy Studies(IPS) released a second study, which examines the tax-payer burden of restaurants handing out millions in "performance pay" to their CEOs in order to avoid paying higher taxes. IPS explains: During the past two years, the CEOs of the 20 largest [National Restaurant Association] members pocketed more than $662 million in fully deductible “performance pay,” lowering their companies’ IRS bills by an estimated $232 million. That would be enough to cover the cost of food stamps for more than 145,000 households for a year. … The next four largest beneficiaries of the CEO pay subsidy are fast food corporations. Chipotle, Yum! Brands (owner of Taco Bell, KFC, and Pizza Hut), McDonald’s, and Dunkin’ Brands each raked in CEO pay subsidies ranging from $12 million to $68 million over the period. Both studies point to policy solutions to ensure corporations do not have free reign to underpay employees or avoid paying their share of taxes.

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Sarah Berlin is an intern at In These Times.
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