Press Advisory
For Immediate Release - April 8, 1999
Contact:Betsy Leondar-Wright
(617)423-2148

Shareholders Spotlight CEO-Worker
Wage Gap at 8 Companies

Members and associates of Responsible Wealth have filed eight shareholder resolutions calling on companies - Allied Signal, AT&T, BankAmerica, BankBoston, Citigroup, General Electric, Huffy, and R.R. Donnelley - to examine the wage gaps within their labor force.

Some of the resolutions ask the company to set a reasonable ratio between CEO pay and the lowest paid full-time employee in the company and thus permanently link the CEO's pay with the pay of their employees. Others ask the company to report on this ratio. One resolution asks the company to conduct a pay equity study by race and gender. (See attached fact sheet for descriptions of resolutions filed with each company.)

Whereas, we believe that the value of this company has been created not by a small group of leaders, but by thousands of current and former employees working together;

Whereas, business leaders and thinkers ranging from J.P. Morgan to Peter Drucker have argued against wide pay gaps within enterprises and called for limits on executive pay based on multiples of workers' compensation;

THEREFORE, BE IT RESOLVED, that shareholders urge the Board of Directors to address the issue of runaway remuneration of CEOs and the widening gap between highest and lowest paid workers.

- Excerpt from Responsible Wealth resolutions

The resolutions will be voted on at 1999 shareholder meetings, most of which are scheduled for April, May, or June, 1999. Meetings will take place in northern New Jersey, Houston, TX, Charlotte NC, Boston MA, New York City, Dayton OH, and Chicago IL.

These 8 resolutions and others on the wage gap combine two traditionally separate types of resolutions, as CEO pay and the wage gap become greater social concerns. Shareholder resolutions have historically fallen into two types: those sponsored by activist groups concerning social issues (most notably South African apartheid and the environment); and those sponsored by major shareholders concerning corporate governance, including executive compensation.

According to Business Week, the ratio of CEO pay to factory worker pay at the biggest 365 U.S. companies was 326 to 1 in 1997, up from 44 to 1 in 1965. In Japan in 1995, the equivalent ratio was 16 to 1, and in Germany, 21 to 1. Some of the biggest CEO pay raises have been awarded right after huge layoffs, leading to criticism that top executives are being rewarded for eliminating American jobs.

Responsible Wealth, a project of United for a Fair Economy, is a network of business people and investors in the top 5% of income or assets who are concerned about growing economic inequality and are taking action to promote a fairer economy.

United for a Fair Economy & Responsible Wealth 1999 Shareholder Campaign on CEO Pay and the Wage Gap

United for a Fair Economy's Responsible Wealth project has coordinated the filing of eight shareholder resolutions that will be voted on at company annual meetings this spring. While all the resolutions deal with various aspects of wage and wealth gaps, some of the resolutions simply call upon companies to report on changes in the wage gap over the last ten years, while others call upon companies to cap CEO compensation at a multiple of the lowest paid worker's compensation.

AT&T -- The resolution calls for the company to establish a cap on CEO pay. AT&T is in the midst of an on-going downsizing program that has eliminated tens of thousands of jobs in the last three years. The company froze senior executive's pay in early 1998 in the wake of additional downsizing announcements. A 1997 shareholder resolution calling upon AT&T to consider freezing pay during periods of cost-cutting drew support from 14.4% of shareholders. Annual Meeting: May 22, 1999 in Houston, Texas.

Allied Signal -- The resolution asks the Board to establish a pay cap expressed as a multiple of lowest paid worker's compensation. Allied Signal's CEO Lawrence Bossidy, is one of America's highest paid corporate executives. His pay keeps rising even as cost-cutting layoffs continue -- more than 11,000 in the last two years. Annual Meeting: April 26, 1999 in Morristown, NJ.

BankAmerica -- The resolution calls for the Board to establish a pay cap on CEO pay expressed as a multiple of lowest paid worker's compensation. BankAmerica/Nations Bank has been one of the leading downsizers in its industry, while costs in the executive suite, including a lucrative severance package for ousted President David Coulter, continue to rise sharply. Annual Meeting: April (date TBA) in Charlotte, NC

BankBoston -- The resolution calls upon the company to extend its leadership in areas such as CRA and providing stock ownership to all employees by exerting leadership in controlling executive pay by adopting a pay cap expressed as multiple of lowest paid worker's compensation. Annual Meeting: Late April in Boston, MA

Citigroup -- The resolution asks the Board to establish a cap on CEO pay expressed as multiple of lowest paid worker's compensation. Co-CEO Sanford Weill is perpetually one of America's highest paid CEOs taking in $230 million in 1997. Citigroup recently announced more than 10,000 workers would lose their jobs as a result of a restructuring following the merger of Travelers and Citicorp. Annual Meeting: Date TBA in New York City

General Electric -- The resolution asks the company to cap executive pay at a multiple of lowest paid worker's compensation. This same resolution garnered support from 6% of GE's shareholders in 1998. GE, a pioneer in corporate downsizing, continues to eliminate thousands of jobs each year as CEO pay has soared. Annual Meeting: April 29, 1999; Location TBA.

Huffy -- The resolution asks the company to report on the ratio between highest and lowest paid workers over each of the last ten years. The resolution is offered in the wake of a plant closing that eliminated 1,000 jobs at a time when CEO and Board pay is rising handsomely. Annual Meeting: April 22, 1999 in Dayton, OH

R.R. Donnelley -- The resolution calls upon the company to engage in a gender and racial pay equity study. The resolution is offered in the wake of yet another discrimination problem (on top of the $500 million race discrimination class action suit) -- a Department of Labor finding of violation of the Pay Equity Act that awarded two dozen women managers and professionals back pay. Annual Meeting: late March in Chicago, IL