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The pay of CEOs has absolutely skyrocketed over the past couple of decades to levels that are

quite alarming. Wages for ordinary people have gone up 18 percent while the wages for CEOs have

gone up 1400 percent. It doesn't have to be this way. You can actually run a big company

without paying somebody a hundred million dollars a year. You know this is just neoliberalism run

a mock. From the home offices of civic ventures in downtown Seattle, this is pitchfork economics

with Nick Hanauer, the best place to get the truth about who gets what and why.

I'm Nick Hanauer, founder of Civic Ventures. I'm David Goldstein, senior fellow at Civic Ventures.

One of the great things about doing an economics podcast with you, Nick, is that we get your

insider's view, the inside the room perspective on how terribly wrong the economy has gone

these past 40 years because you've been in the CEO's office. You know exactly how all all this

works and one of the things that's happened over the past 40 years is this explosion in CEO pay.

So tell us, Nick, how do you guys do this? How do you pull this off?

Well, it is in the true sense of the word. It is a racket and it's this weird arms race that a

few people win and everybody else in the society is losing and it's always driven me crazy.

It is one of these collective action problems that is very hard to battle, but there is this

process. So if you're wondering how CEO pay is set, let me tell you, there will be a committee

of the board of directors usually helmed by another CEO of a big company called the compensation

committee. And on an annual or semi-annual basis, the compensation committee does an analysis

of how much the CEO in the executive should be compensated. And what that compensation committee

...