Elizabeth Warren this week introduced a plan for legislation that would rein in big business, redistribute wealth and potentially curb corporate political donations.
The Accountable Capitalism Act, which Warren announced in an article for the Wall Street Journal, “restores the idea that giant American corporations should look out for American interests”, the Massachusetts senator and potential presidential candidate wrote.
Corporations have a “feedback loop”, according to Warren, in which executives receive shares in a company “as a reward for producing short-term share-price increases”. That, Warren says, is one of the reasons why the average chief executive of a big company makes 361 times what an average worker makes. In 1980, a top CEO made 42 times the average worker’s wage.
The bill would eliminate those incentives and give workers more of a voice on company boards. Companies with more than $1bn in annual revenue would be required to have employees elect 40% of directors, and have the approval of 75% of directors and shareholders before making any political donations.