Most entertainment giants won’t have to face a shareholder Say on Pay vote until early next year, but the Writers Guild and SAG-AFTRA have effectively pointed to massive paychecks of top executives as a sign that the companies can make a deal.
“Is this fair? Fairness is in the eyes of the beholder, obviously, but it certainly doesn’t feel it and it does rub a lot of people the wrong way,” says Reich. “It seems like the game is rigged against average working people and in favor of people at the top. You have a lot of anger, a lot of frustration, and you have ultimately work stoppages and strikes.”
When the writers and actors struck in 1960, top executives made a mere fraction of what they do today and only about 20 times that of the typical worker. According to a 2022 study from EPI, CEO pay increased 1,460 percent from 1978 to 2021. In those intervening years, Reich notes, there was an increase in executive pay coming in the form of stocks and stock options. That created an incentive for CEOs to increase the price of shares through things like stock buybacks, which not only made the executives money but also made them seem more valuable to the business.
“If they have a record of being able to push stock prices up, that makes them somebody who their directors want to pay more,” says Reich. “No set of directors in any corporation is going to want to tell shareholders that they held back and didn’t get the best top executive they could.” Steven Kaplan, a professor at the University of Chicago Booth School of Business notes that now the median salary for CEOs at S&P 500 companies is about $15 million. “People have complained about [those salaries] for decades, and it doesn’t change because that’s the market,” Kaplan says. “They’re very rare, it’s a very hard job and that’s what they get paid. The entertainment CEOs are paid, in many cases, a lot more than that.
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