Teamsters Notch Largest Ever Win Against CEO Pay
70% of Marathon Petroleum investors voted against a $6 million golden parachute thanks to the union
CEO pay has been ballooning in recent years as worker pay has stayed stagnant, leading to an increasing wage gap between the bosses and employees. Fed up with the high price of CEO’s pay, the Teamsters launched a “Say-on-Pay” campaign to stop a proposed hike for Marathon Petroleum’s CEO.
The vote, which was held at the company’s shareholder meeting, was about the compensation for Gary Heminger, who had recently retired as CEO of the company and was stepping down as board chair the day after the meeting. The highlight of his compensation was $6 million in restricted stock. Marathon under Heminger had dealt with a number of issues recently including locking out longtime refinery workers in St. Paul Park, MN. These workers have been warning that an industrial accident could occur at the refinery and that the results would be catastrophic. Yet Marathon has done nothing to fix the refinery. As the vote on his compensation was being announced, Texas City, Texas was forced to issue a shelter in place order after a Marathon refinery began leaking hydrofluoric acid. The company also had to deal with the collapse of their new headquarters that was being built in Houston.
Marathon, which is the largest US independent refining company in the United States also announced they would be laying off 12% of their workforce. This was even after receiving $2.1 billion in tax benefits from the CARES Act.
With all of this going on the Teamsters decided to orchestrate a campaign to block the pay package for Heminger. The campaign ended up being more successful than anyone could have imagined with 70% of shares opposing the compensation plan. This was the worst ever loss for an S&P 500 energy company.
“With the recent announcement of an overwhelming say-on-pay defeat at Marathon Petroleum, shareholders sent an emphatic message to the company’s Board of Directors – stop rewarding executives with lavish pay packages that are both unwarranted when measured by performance and out-of-touch with reality at what is going on within the company,” said Ken Hall, International Brotherhood of Teamsters General Secretary-Treasurer. “Marathon investors are not impressed with the golden parachutes the company provides its executives, the 379:1 CEO to median employee pay ratio, and the risks the company has created by jeopardizing safety at its St. Paul Park refinery by locking out its workers. Placing workers, the community, and the environment at undue risk is a clear ESG failure reflected in the vote.”