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'Greedy' Union Leaders? Check the Record

How can firms that reward CEOs in multiple millions claim that labor chiefs are overpaid?

June 02, 1996|HARRY BERNSTEIN | Harry Bernstein was for many years The Times' labor writer

With many corporate chief executive officers raking in millions of dollars a year, it might seem both embarrassing and ineffective for companies to urge their workers to reject unions because of greedy union leaders.

But despite their own record increases in salaries, bonuses and stock options, that old anti-union tactic is still very much in vogue. A union campaign flyer recently quoted Don Shinkle, vice president for international public affairs of the giant, nonunion Wal-Mart Stores operation:

"Union leaders are desirous of increasing their membership and thereby increasing union dues. Tragically, a lot of those leaders would rather be driving Mercedes than Cadillacs."

The average take of CEOs at 424 of the nation's largest corporations in 1994 was $4.3 million, and rising; the average salary of the 60 highest paid union leaders is about $160,000.

At Wal-Mart, CEO David Glass got only $1.4 million. Perhaps to make up for the below-average shortfall, Glass recently told the Securities and Exchange Commission that he would sell 7% of his stock. That's about 200,000 Wal-Mart shares, currently worth around $5 million at $25 a share, which should help plug the gap and still leave him 93% of his stock.

Disparities between CEO incomes and those of union leaders and the average worker rise with each passing day. The average CEO took in 145 times the amount the average worker earned in 1990. Just two years later, CEO income had jumped to 187 times the pay of an average worker, whose real income was declining.

The numbers are numbing. A study by Graef Crystal, a corporate pay expert, reports that Ralph J. Roberts of Comcast Corp. got $24.5 million in 1995. Lawrence A. Bossidy, president of Allied Signal Inc., got $30.5 million.

Union leaders are not suffering, but the highest-ranking union leader in the country, though not the highest paid, is John Sweeney, president of the 14 million-member AFL-CIO. His salary is $192,000. He is the leader of far more workers than any CEO anywhere.

There are a very few examples of substantial income made by union officials, and many unionists regard them as scandalous. But even the wealthiest of them are pikers compared with corporate executives' compensation.

Robert A. Georgine, president of the AFL-CIO's building and construction trades department, is the highest paid U.S. union official (and probably the highest in the world), although his exact income is something of a mystery. A spokesman for a union-owned life insurance company that Georgine heads said that Georgine donates his construction department salary--said to be about $200,000--to a university, but Georgine is said to make from $500,000 to $1 million a year more from the Union Labor Life Insurance Co. Ullico, primarily owned by unions, provides insurance and loans to unions and their members.

Another handsomely paid union leader is Gus Bevona, who heads a 6,500-member New York local of the Service Employees, for which he is paid $422,727. Mike Riley, head of the Southern California Teamsters Joint Council 42, was making more than $400,000 until Teamster reform president Ron Carey eliminated an entire level of Teamster officials. Riley reportedly still makes about $250,000 from his local union and the joint council.

So while a handful of union leaders do get excessive pay by the standards of the average worker, it's a drop in the ocean compared with the millions taken in by corporate executives.

Stock prices and the reputations of cost-cutting CEOs often rise when jobs are eliminated and wages and benefits cut. The reputations of union leaders rest mainly on their ability to save their members' jobs and help win them an adequate income. There is a world of difference, when they do their work properly, in both their goals and compensation.

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