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CEO pay ratio gap continued to widen in 2019

The pay gap between corporate chief executives and rank-and-file employees continued to widen during 2019.

The chief executives of five area corporations — Hanesbrands Inc., Wells Fargo & Co., Caterpillar Inc., Lowe’s Cos. Inc. and Tanger Factory Outlet Centers Inc. — received at least $500 in compensation for every $1 paid to their median employee.

The smallest difference was a $12-to-$1 ratio for Robert Spilman Jr., chief executive of Bassett Furniture Industries Inc.

Since 1994, the annual salary, bonus and incentives, stock awards and other compensation of top-five executives from publicly traded companies have been disclosed by requirement of federal regulators.

An element of the Dodd-Frank federal regulatory act that went into effect in 2017 requires corporations to put a number and a ratio to the compensation gap between chief executives and their median employee salary.

For the second consecutive year, Hanesbrands chief executive Gerald Evans Jr. tops the CEO pay ratio gap.

Total 2019 compensation for Evans was $3.96 million in 2018. Although Evans was paid $1.1 million in salary, the bulk of his compensation was $2.31 million in incentive pay.

Evans’ total compensation for 2019 was down 55.2% from 2018 because Hanesbrands did not provide stock awards.

By comparison, Hanesbrands reported the median annual employee compensation was $5,784 for its nearly 63,000 employees, of which about 87% work in Central America, the Caribbean Basin and Asia. The median employee was determined to be a production operator in Honduras.

It was by far the lowest annual salary for a median employee for the 29 listed corporations.

That means Evans’ pay ratio is $591 in total compensation for every $1 paid to a median employee, as well as a $190.20 to $1 salary ratio.

Retail widens ratio gap

Of the other top-five CEOs in terms of pay gap, three have a retail presence in Wells Fargo, Lowe’s and Tanger, while Caterpillar has a major global workforce that works to pull down the salary of its median employee.

For example, Wells Fargo chief executive Charlie Scharf began his new job Oct. 1, so the $498,084 he earned in salary over 10 weeks equates to a $7.55 to $1 ratio with the bank’s median employee salary of $65.931.

However, Scharf is scheduled to make $2.5 million in salary for 2020, which would increase the gap to $37.91 to $1.

What boosted Scharf to a $550 to $1 ratio in total compensation was Wells Fargo providing him with stock awards valued at $28.79 million.

Meanwhile, Tanger chief executive Steven Tanger had a $511 to $1 ratio based on $6.57 million in total compensation and a median employee compensation of $12,954.

The CEO pay ratio chart continues to reflect decisions by corporate boards of directors to reward based on stock performance, rather than profits and revenue.

Corporate America made that shift during the depths of the 2008-11 economic downturn and the height of backlash against executive compensation.

Although federal regulators require corporations to declare the value annually, executives typically are required to wait a specified amount of time — often one to three years — to receive those shares or exercise the options.

The prevailing theory is that executives will be more inclined to be prudent with shareholder value, potentially taking less risk, if their own compensation is weighted primarily toward share-price performance.

Some pro-business groups, such as the U.S. Chamber of Commerce and National Retail Federation, fought efforts to disclose the CEO pay ratio.

The retail trade group calls the ratio “a flawed measure that unfairly singles out industries, like retail, that have high percentages of part-time, seasonal and entry-level employees.”

“Failing to adjust for the large number of part-time and seasonal workers inflates retail’s ratios by an estimated 31% over typical employers.”

The federation recommends comparing median earnings that factor out part-time workers.

Allan Freyer, director of workers’ rights for the left-leaning N.C. Justice Center, said working people “have long wondered why their wages have remained stagnant over the past 30 years.”

“Now, we know.”

The left-leaning Institute for Policy Studies determined that of the 50 publicly traded U.S. corporations with the widest pay ratio gaps in 2018, “the typical employee would have to work at least 1,000 years to earn what their CEO made in just one.”

Among S&P 500 firms, nearly 80% paid their CEO more than 100 times their median worker pay in 2018, and nearly 10% had median pay below the poverty line for a family of four.

The institute said it supports a CEO pay strategy of Democratic presidential candidate Bernie Sanders.

Sanders favored tax penalties ranging from 0.5 percentage points on pay ratios over $100 to $1, to 5 percentage points on ratios above $500 to $1.

“S&P 500 corporations as a whole would have owed as much as $17.2 billion more in 2018 federal taxes if they were subject to (those) tax penalties,” the institute said in a September 2019 report.

“Tax penalties on extreme CEO-worker pay gaps would encourage large corporations to narrow their divides — by lifting up the bottom and/or bringing down the top of their wage scales.

“Such reforms would also give a boost to small businesses and employee-owned firms and cooperatives that spread their resources more equitably than most large corporate enterprises.”

The institute said the tax penalties have become more relevant “in light of the Republican-sponsored congressional legislation that slashed the corporate tax rate from 35% to 21% in late 2017.

“Republican leaders promised that corporations would invest their windfalls to boost working families,” the institute said.

“Instead, U.S. companies announced a record-setting $1 trillion in stock buybacks in 2018, a maneuver that serves only to enrich wealthy shareholders and top corporate executives.”

Throw up your hands

Analysts and economists say the new CEO pay ratio has the potential to make the issue more of a paycheck and dinner table conversation.

Or, it could just provide another throw-up-your-hands, what-can-you-do round of frustration.

“The whole purpose of compensation disclosures is to allow shareholders to make an informed judgment regarding the say-for-pay decisions that are also enabled by Dodd-Frank,” said Tony Plath, a retired finance professor at UNC Charlotte.

“So far, anyway, it looks to me like most shareholders (except large institutional shareholders and the shareholder advisory services) are basically ignoring this information, or at least they’re not expressing much criticism of CEO compensation rates these days,” Plath said.

Less important, but more important

Zagros Madjd-Sadjadi, an economics professor at Winston-Salem State University, said CEO pay ratio disclosures “are simultaneously less important and more important in the era of COVID-19.”

“They are less important since CEOs have often cut their pay by a greater percentage than their workers have received and thus the pay ratios have decreased in size.”

“However, they are more important because they highlight what many workers see as a fundamental inequality between management and staff in terms, not only of pay, but also of importance to the company itself.”

He cited as an example that the Walt Disney Co. laid off 100,000 employees.

“Their top managerial staff has taken pay cuts that, while larger in terms of percentages and amounts, still leave them in most cases with pay that is significantly in excess of what even those front-line workers and lower management who are still employed make even with those cuts,” Madjd-Sadjadi said.

“Cutting compensation tends to drive people to start looking elsewhere, as well as within their own companies, and encourages people to question the differences in pay.

“This will likely lead to a lot less corporate loyalty and much more job-hopping once the economy fully recovers and this will cause a dramatic reduction in institutional memory from these companies that may never fully be recovered.”


Z-no-digital
Churches start offering drive-in services as coronavirus restrictions ease

Providence Church Greensboro held its first outdoor church service after the phase one reopen plan began in North Carolina. Statewide restrictions in response to the coronavirus pandemic had forced churches to suspend services. Under phase one, services can be held outdoors if congregants remain 6 feet apart.


State
NC coronavirus victim survived the Depression and Jim Crow before she came home to rest

RALEIGH — In any other time there would have been hundreds of mourners gathered here, in the shade of the trees where Cleora Mann spent most of her 104 years.

For a long time, she liked to garden at the edge of the woods. She planted turnip greens, beets, tomatoes. She found solace working with the land, in a land that didn’t always love her back.

She’d had 16 children, and outlived four of them. When her husband died, in 1954, she was pregnant with her youngest. She never did remarry. Her sons and daughters grew up in an era when walking down the country road at the end of the driveway tested their courage. People drove by and threw eggs at them. A neighbor’s dogs put the fear in them.

“Those dogs would come out,” said Robert Mann, one of her sons, “and he wouldn’t ever call them back.”

Now Robert Mann is 78, and on a recent Friday he stood near the oak tree that for decades offered he and his siblings the kind gift of cool shadows. They’d grown up without running water or indoor plumbing, let alone air conditioning.

He wore a dark suit and a face mask. Soon the Hearse turned between the black iron gates and slowly moved up the driveway. Cleora Mann was coming home.

She was born in 1915; she would have been 3 or 4 when the Spanish flu killed millions. She lived through two world wars and the Great Depression. Mann, who was black, survived the horrors of the Jim Crow South. She was in her 50s during the civil rights movement. She lived long enough to vote for America’s first black president.

And then, after a century of life, she died quietly and alone of COVID-19.

The day of her funeral, her family was still reconciling how quickly everything had turned. Robert Mann received a call from the Louisburg Healthcare and Rehabilitation Center on a Wednesday, informing him that his mom had tested positive for the disease caused by the novel coronavirus. By Saturday, he learned that she wasn’t eating. The next morning, he learned she was having difficulty breathing.

That afternoon, she was gone.

For years she had suffered from dementia, but physically she’d been strong. And then the Louisburg Healthcare and Rehabilitation Center became overrun with the virus. Out of 61 residents at the facility, 56 have tested positive. Eighteen died. Thirteen staff members have tested positive, too.

Some residents died in the hospital nearby. Cleora Mann died in her room. After, one of her daughters, Ernestine Keith, came to see her, and had to look in through her window.

Less than a week later, that was still one of the most difficult parts of it all: 12 surviving children, 29 grandchildren, 36 great-grandchildren, 15 great-great-grandchildren — and nobody could be with her when she died. Nobody could hug her or hold her hand in the end. It’d left Robert, her fifth-oldest, with a “helpless feeling,” he said, “not to be able to visit her.”

A socially distanced funeral

Now Robert Mann began making his way toward the small family cemetery, on the other end of a short path through the trees. The hearse followed behind. Five men slid the cream-white casket from the back and carried it to the grave. On one side of the grave was a large pile of reddish-brown clay, freshly dug out of the ground. On the other were two rows of chairs.

Robert sat in the front, nearest the casket. His sister Ernestine sat a couple of chairs over. About a dozen others stood around the canopy. Everyone wore masks and kept their distance.

Curtis Gupton, one of Cleora’s grandsons, stood behind the chairs and held an iPad against his chest. About 40 members of the family watched the funeral through its camera.

“Everybody in? If you can’t see, let me know,” Gupton told them, and moments later the service began.

The minister stood at the front and spoke loud enough so everyone could hear. He wore a black shirt and clerical collar. His name was Larry Keith, and he was one of Cleora’s sons-in-law. He and Ernestine have been married for 47 years, and he could remember Cleora telling him that he couldn’t date her daughter until she turned 16. They were only two years apart.

Over the past five decades, Keith became less like a son-in-law and more like a son. He spoke with a spiritual reverence of a woman he’d known most of his life. Now he introduced another preacher who began reciting a prayer, and the small congregation answered each sentence with different versions of “amen.”

“Father, we thank you God, how you looked down upon her for many, many, many years.”

“Lord, thank you.”

“And oh God, even in times like these, when family members can’t come together, God, and hold hands and see one another, and touch one another, God, you’re still God, you still bless, you still make ways out of no way.”

“Oh, yes.”

“We thank you God, because you did bless (her) for 104 years.”

“Oh, hallelujah.”

“And so God, we’re grateful, and we’re thankful for her life.”

“Yes, Jesus.”

“And the life that she lived, and the children, the legacy that she left behind.”

“Yes ... oh, hallelujah.”

Family has owned the land since slavery

The land where everybody had gathered was a part of that legacy. It had been in their family since the 1800s. As best Robert could tell the story, his family’s ownership of the land could be traced to the days of slavery. A slavemaster, he said, fathered a daughter with one of his slaves. Later, that daughter and her husband “gained favor” with the slavemaster, Robert said.

“And she was able to purchase 105 acres of land back then,” he said. “And that’s how we were able to get the property.”

Eventually, his father was born on this land. Cleora grew up about a mile away. They married when she was 19, and at first Cleora and her husband, James, lived in what was nothing more than a log house that stood near the cemetery where she’d come home to be buried. After that, she and her husband moved into a small four-room house on the other side of a patch of trees.

To supply water, Robert and his siblings would retrieve it from a stream on the edge of the property and carry it back up a hill. Cleora worked as a housekeeper. If they needed to go anywhere, they walked. Her children worked in nearby tobacco fields, or picked cotton. They labored 10 or 11 hours per day, Robert said, earning $3 for a day’s work. They gave most of it back to their mom.

The family could tell a lot of stories about Cleora, and many of those stories revolved around two things: her work ethic and her cooking, and particularly her biscuits and pies.

“She always had some type of pie cooked,” said Matthew Keith, one of those grandsons, and he could also still smell her buttermilk biscuits. She offered those as a reward for a day’s work, said Gupton, the grandson who held the iPad during her funeral.

“There was nothing like her fixing those biscuits, those fresh biscuits,” he said. “And she would feed you, but you worked.”

Perhaps that was the trait she’d most instilled in her children and grandchildren: her relentless drive to keep going, to continue working, day after day, no matter how difficult the circumstances. For a long time, Robert Mann has kept a black-and-white photograph that reminds him of his mother’s challenges.

The picture is from the mid-1950s. In it, Cleora Mann is sitting in front of that small house, which stood about where part of the driveway is now. In the photo, she’s surrounded by her children. She’s pregnant, and her husband had just died, and she’s wearing the tired but determined expression of a woman faced with raising 16 kids on her own. Robert keeps that photograph close. He pulled it out again after the funeral and stared into his childhood.

He and his siblings could all remember one of their mom’s prayers, how she always said she wanted to live long enough “to see all her children get grown.” She did, and then lived long enough to watch some of them become grandparents themselves.

“She gave up her life, put her life on hold, for us,” Robert said. “Didn’t have that much. Materially, she didn’t have that much to sacrifice, because we didn’t have anything. But she put her life on hold. She made sure that we had food no matter if it was chicken or just gravy.”

Sometimes it was just gravy, and that didn’t matter.

“She could take some flour and water and salt and pepper and do wonders with it,” Robert said.

The first running water, in 1969

Four of his siblings went on to college. Robert did not, but moved to New Jersey and worked his way up in the heating and air conditioning business. First he was a door-to-door salesman. Then he started his own business. It slowly took off. By 1969, he had enough money to put a trailer on the property, and finally his mom moved out of that four-room house.

The trailer was modest but in other ways palatial. For the first time in her life, Cleora had running water.

“We had bathrooms,” Robert said. “We never had bathrooms before.”

Over the next two decades, his business was so successful that after a while, he could afford another upgrade for his mother. In 1988, he built a large brick house in front of that trailer. Cleora lived in the house on her own until she was 95.

From the road out front — the same road where Robert and his siblings dodged eggs and sprinted from dogs, if only because people nearby didn’t like the sight of black children — the home he built for his mother looks like an estate.

A fence borders the road. A black iron gate is at the foot of the driveway. The front yard, almost 7 acres of it, is covered in bright green grass, neatly manicured. The day of the funeral, luxury cars lined the driveway where once, in another time, Cleora Mann grew vegetables to feed her family.

Robert looked around, surrounded by the proof of success but also memories of more difficult times, the ones his mother taught her children to fight through.

“God is good,” he said.

Last goodbyes

Now at the service, the funeral director, a tall, broad-shouldered man whose family had run the Richardson Funeral Home since 1918, invited the mourners to line up and say goodbye to the woman they’d come to celebrate. Herbert Richardson, wearing white gloves, opened the lid of the casket. The 15 people who lived close enough to come lined up to view her one last time, and say goodbye.

They stood in their masks and their suits and gave each other space. They’d known this day was coming for a while, but not like this. Not with the end so sudden, without a chance to be by her side, without a chance for the entire family to come together.

“I envisioned us having a big celebration with 500 or more people,” said Larry Mann, another of Cleora’s sons, and he said that vision included a gathering filled with “embracing and celebrating.”

In the back of his mind, he wondered how the virus had spread so quickly in that nursing home. Nowhere else in Franklin County had been hit so hard. He wondered how it had spread throughout America. He couldn’t avoid the thought that “we waited too long” to act, he said.

He and his wife lined up and walked past the casket. Each person who passed shared a short, quiet moment. Soon the last person had walked by, and Richardson gently lowered the casket lid. There were more prayers and amens, and Larry Keith, the minister with the clerical collar, concluded the service.

“I believe that Mama felt like she was already ready,” he said.

Her family, the small part of it that could be here, walked back on the path through the trees, toward the large brick house. Robert had set up chairs, spaced more than 6 feet apart, in an expansive gazebo next to the driveway. He and the others sat for a while and told stories, and for a time they could see her working her garden again or planting flowers; they could smell her biscuits or taste her coconut pie.

Now those memories brought comfort. Beyond the trees, the funeral director and his son folded the chairs and packed them away. They lowered the casket into the earth. Moments later the hearse, now empty, slowly rolled past the family and down the driveway.

Near the gazebo came the sound of a small tractor. A man guided it down the path and into the cemetery and moved the reddish-brown clay back into the rectangular grave he’d dug a day earlier.

Soon the grave was covered, and Cleora Mann had become part of the land she loved.

Photos: Cleora W. Mann

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Education
'This is our job': New nurses graduate Triad schools in middle of pandemic

Chelsea Carmon was in the middle of performing a nursing preceptorship, a period of hands-on learning under a seasoned professional, when it was called off in mid-March.

It was supposed to be the capstone to her nursing studies at UNCG, “the closest thing to being an RN without having a license.” But with the COVID-19 crisis sweeping through the country, she had to finish coursework virtually.

“The preceptorship really gives you that confidence you need,” Carmon said. “I was able to do a lot of patient care, assessments. Online courses seem fine. But in all honesty, as nursing students we like to be in class, we like to be engaged. We want to learn hands-on. We were really sad about this.”

With graduation this month, though, she and many other nursing students around the Triad will soon head into the field. Some are already there.

Concerns about COVID-19 and the availability of personal protective equipment are top of mind for them, but they are also eager to start their careers.

Faculty report that job offers for students are comparable to years past, though perhaps a bit more numerous as the semester wound down. And many of those students will work with temporary permits issued by the North Carolina Board of Nursing, as the COVID-19 crisis has caused delays in the administration of the NCLEX test, which is required for licensure.

The permits, which are valid for six months, allow those who’ve completed a nursing education program to work under the supervision of a licensed registered nurse.

“These students (working with the permit) will be able to do what a registered nurse can do, but a registered nurse has to be available at all times,” said Lynne Lewallen, associate dean for academic affairs at UNCG’s School of Nursing.

In March, the Board of Nursing also announced that it would allow students to complete clinical hours remotely.

“We’ve purchased software that simulates the taking care of patients, and promotes critical thinking and decision making,” said Sharon Moore, associate dean of nursing at Forsyth Tech Community College. “And there are some intensive programs that help guide students through those decision-making processes that they would encounter if they had a real human being in front of them.”

Beyond their regular curriculum, instructors and students have been having discussions on how to expand their roles as caregivers in what has turned out to be “the new normal.”

“We’ve talked about safety, but we’ve also talked about how you would manage people dying alone,” said Terry Ward, director of the School of Nursing at N.C. A&T. “We haven’t really had to ramp up anything, but we’ve just had to make sure that we can deliver the same quality. And we’re trying to do everything we can to take care of each other.”

Cecil Holland, associate dean of the division of nursing at Winston-Salem State University, said his school still held its pinning ceremony, which has long been a tradition, though this year it was done virtually.

“Each school has a pin designating where the student graduated from, and getting it is really the culmination of their experience in the nursing program,” he said. “It’s really significant. Typically the student walks across the stage and the faculty pins them (by placing the pin on their lapel or collar).”

However, this year, a significant other or family member pinned the student. Everything was shared on the video platform Zoom.

Rosa Gonzalez, who graduated this semester from UNCG and is planning to specialize in oncology, was supposed to start working on her clinical hours in March, but wound up having to self-quarantine for two weeks after taking a cruise during spring break.

“They ended up canceling clinicals anyway, and we had to find an alternative way to get hours,” she said. “We did the modules online, but it was harder than what it would normally be. It was a lot to deal with. And it is kind of scary, but in the medical field you’re here to help people. And I like knowing I could make a difference in this historic moment.”

Alicia Ambrose, who graduated from Forsyth Tech this weekend and has a background as a nurse assistant, has worked on the COVID unit at Wake Forest Baptist Medical Center.

She said she would advise people readying to enter the field to give themselves some “debriefing time.”

“You have to allow yourself permission to process what is going on,” she said. “You just need that space away from it. For me, I exercise to deal with it. Because it is a lot to handle. But those patients need your help. And you take care of yourself, so you can take care of them.”

In recent weeks, many have dubbed health care professionals heroes, but Carmon said that’s not a term she would apply to herself.

“We’re not heroes,” she said. “This is our job. This is what nurses have done forever. It’s true we’re front-line workers, we do what we do. Nurses are doing their jobs the way they’ve always done them. It’s just now, we’re in kind of an unknown situation.”


Z-no-digital
Sunday's COVID-19 numbers show 3 more deaths in N.C. and 404 new cases since Saturday

Number of N.C. cases: 14,764 as of 11 a.m. Sunday, according to the N.C. Department of Health and Human Services. That’s an increase of 404 cases since Saturday.

In the Triad: Guilford County has 592 cases, an increase of 18 cases; Forsyth has 373; Randolph, 338; Davidson, 202; Alamance, 172; and Rockingham County, 40.

Deaths: 547 statewide, according to state health officials, which is 3 more than Saturday. That includes 38 in Guilford County, the same number of deaths as Saturday, state data show.

Hospitalizations and recoveries: Guilford County is reporting 121 people hospitalized, and 250 recovered from the coronavirus as of 3 p.m. Friday, the latest data available.

Across the U.S.: The number of confirmed and probable cases in the United States and its territories as of Saturday afternoon was nearly 1.27 million, an increase of nearly 26,000 new cases since Friday, according to the most recent update from the Centers for Disease Control and Prevention. The CDC reported on Saturday there have been 77,034 total deaths, an increase of 1,557 deaths over Friday’s figures.