As your faithful correspondent, I was compelled to read Governor Bruce Rauner’s recent essay on why he vetoed the state budget. The piece was conveniently located on the editorial page of my Chicago Tribune, home delivered as always.
Coincidentally, that’s the same paper that recently gave me an update on the salaries of the top corporate CEOs in Illinois.
There’s a connection between executive pay and Rauner’s essay that I’ll get to in a minute. First, though, I’ll note that Rauner’s op-ed piece is one of the latest salvos in his public relations campaign to explain why it’s a good idea to bring state government to a crashing halt by vetoing the budget passed by Democrats. He argues that their budget doesn’t cut enough spending—such as aid to autism patients, to cite but one program that the governor has targeted before.
In his essay, Rauner says he wants to cut such spending because it’s the right thing to do and one day all of us will thank him—even, presumably, autism patients. “The Rauner administration is proposing reforms that are reasonable and balanced,” Rauner writes. “If Republicans and Democrats commit to working together, we can reach a bipartisan, common-sense agreement to reverse Illinois’ economic decline and set the stage for a bright economic future.”
Two questions immediately popped into my mind when I read that passage. First of all, when did Rauner start referring to his administration in the third person? And second, is Illinois’s economy really in decline? I had to wonder after seeing those CEO salaries—which I really will get to shortly.
Generally, Rauner blames the allegedly sad state of the Illinois economy on unions and Democrats, starting with house speaker Michael Madigan. His recent TV commercials—paid for by donations from some of our state’s wealthiest citizens—blast Madigan and Democratic lawmakers, alleging “all they want is higher taxes.” But, perhaps as part of his effort to find a “bipartisan” solution, the governor refrained from ripping Madigan in his Trib essay. Instead, he uses the essay to propose “meaningful lawsuit reform.”
In other words, if the unmentioned Speaker Madigan agrees to make it harder for people to sue businesses, the governor may be more interested in sending aid to autism patients.
As always, I caution everyone to be wary of any proposal that a governor—or a mayor or a house speaker, for that matter—calls “reform.”
For instance, let’s say a nursing home was socked with a multimillion-dollar wrongful-death judgment after several patients died while under its care. With “lawsuit reform,” it would probably be harder for relatives of the patients to win their case, no matter how poor the care was at the nursing home. From the vantage point of Rauner and his business allies, the nursing home would save money, which would then enable it to pay more to its staff—if, that is, the owners don’t keep the money for themselves. Feel free to call it trickle-down economics, though of course Rauner won’t.
OK, I must admit that I didn’t randomly choose that example. As you may recall, Rauner’s old investment company owned a nursing-home chain that was hit with more than $1 billion in such judgments. However, when families of the dead relatives tried to collect, they discovered that the nursing-home company had been sold to a retired graphic artist named Barry Saacks, who said he didn’t know he owned it. It was one of my favorite revelations to emerge from last year’s gubernatorial campaign.
Anyway, Rauner’s essay made me curious about how much free enterprise is suffering around here. And that brings me to those CEO salaries.
According to the Tribune, capitalism is alive and well in Illinois. “Top executives at Illinois’ biggest public companies got bigger raises in 2014 than their peers nationally,” reads the first sentence in Becky Yerak’s June 21 story. Wait, there’s more: Median pay for these execs was $5.7 million, a boost of 13 percent from 2013. And more: “In 2014, five Illinois executives took home more than $20 million. That’s one more than the previous year.” Let’s not forget this: 22 corporate leaders collected more than $10 million, five more than a year earlier. And finally: About a dozen Illinois executives got raises “even as their stock prices were down for the year.”
To paraphrase Mel Brooks, it pays to be the boss.
At the top of the list was W. James McNerney Jr., the former CEO of Boeing, who hauled in about $29 million in 2014. That’s 24 percent more than he collected in 2013. Just to remind you, Boeing is the aeronautical company that received more than $50 million in state subsidies when it moved its headquarters to Chicago back in 2001.
Number two on the list was Peter Liguori, CEO of Tribune Media, who raked in about $23 million in salary and compensation. Rounding out the top five were Richard Gonzalez of AbbVie ($22 million), Irene Rosenfeld of Mondelez International ($21 million), Samuel Allen of Deere ($20 million), and Mick Dumke of the Reader. Sorry, Mick—I’m just kidding. Somehow you didn’t make the list.
I could go on and on: Miles White of Abbott Laboratories brought in about $18 million, Douglas Oberhelman of Caterpillar received $17 million, Patricia Woertz of Archer Daniels Midland got $17 million—well, suffice it to say, life ain’t bad for Illinois’s CEOs.
Now, it’s possible that Rauner missed this article—which ran on page one of the Sunday business section—because he was too busy reading the Trib‘s editorials that praise him for doing such a great job. If so, I’m urging all 100 CEOs on that list to get on the horn with the governor. Tell him to call off the dogs, since it’s clear you really don’t need his help. v