Posted on 08/29/2007 9:58:19 AM PDT by libertarianPA
WASHINGTON (Reuters) - Top executives at major businesses last year made as much money in one day of work on the job as the average worker made over the entire year, according to a report released on Wednesday.
Chief executive officers from the nation's biggest businesses averaged nearly $11 million in total compensation, according to the 14th annual CEO compensation survey released jointly by the Institute for Policy Studies based in Washington and United for a Fair Economy, a national organization based in Boston.
At the same time, workers at the bottom rung of the U.S. economy received the first federal minimum wage increase in a decade. But the new wage of $5.85 an hour, after being adjusted for inflation, stands 7 percent below where the minimum wage stood a decade ago.
"CEO pay, over that same decade, has increased by roughly 45 percent," the study found.
On average, CEOs at major American corporations saw $1.3 million in pension gains last year. By contrast, 58.5 percent of American households led by a 45- to 54-year old even had a retirement account in 2004, the most recent year these figures were available.
According to the report, between 2001 and 2004, retirement accounts of these average households gained only $3,775 in value a year.
The top 386 CEOs in the study took in perks, such as housing allowances and travel benefits, worth on average $438,342 in 2006. It would take a minimum wage worker 36 years to earn the equivalent of what CEOs averaged in just perks alone.
The 20 highest-paid individuals at publicly traded corporations last year took home, on average, $36.4 million. That's 38 times more than the 20 highest-paid leaders in the non-profit sector and 204 times more than the 20 highest-paid generals in the U.S. military.
American executives significantly out-earn their European counterparts, the study found. In 2006, the 20 highest-paid European managers made an average of $12.5 million, a third as much as the 20 highest-paid U.S. executives took home last year.
Am I the only one who realizes the demented hypocracy in America??? Talk about looking up to the wrong role models!
Their pay is also controlled by the stock holders. That’s us folks. You can’t complain about the pay if you vote to increase their pay. Of course............we could convert to complete socialism so everyone makes the same pay. If that’s what’s wanted elect Hillary.
What, you don’t want your kids to hang posters in their roooms of Vick and Paris?!?
I agree that Hollyweird types and sports "stars" are extremely overpaid.
CEOs run mulit-billion dollar companies and are responsible for creating and maintaining millions of jobs!!!
They also get 'golden parachutes' even when they run a business into the ground. I think their pay and benefits should be directly tied to the level of profit of the company as well as the stock price.
Those amounts of money brought to you by a capitalist economy.
If it’s society, correct me.
“Institute for Policy Studies - Throughout its history, IPS has committed itself to the task of advancing leftist causes. It worked with agents of the Castro regime and championed environmentalist and anti-war positions in the 1960s and 1970s; it declared against the Reagan administration’s efforts to roll back communism in the 1980s; it joined the vanguard of what IPS hails as the “anti-corporate globalization movement” in the 1990s; and, most recently, it has furnished policy research assailing the U.S.-led war in Iraq”.
And for cutting and outsourcing millions more.
The crime in this is the lack of accountability. Company has a good year? CEO makes millions, as they should. Company has a bad year? CEO makes millions. Company earnings down? Lay off a few thousand and rake in multi-million dollar bonuses. For the most part the money paid to the top 50 highest-paid CEOs dowa not represent a good return for the shareholders.
“The crime in this is the lack of accountability.”
What crime?
This really just illustrates the sort of incestuous relationships that exist on most corporate boards... and the lack of fiduciary responsibilty to investors among major fund managers that control most of the votes for who gets on those boards.
Anyone who has worked for a large corporation or had much contact with some of these “top tier” executives knows that many aren’t worth even a small fraction of what they get paid. You don’t need to pay a multi-million dollar salary to buy rank incompetence.
Note, I NOT saying that the government should try to do anything about the situation (that cure would likely be worse then the disease). Nor am I complaining about guys who are able to pull in that sort of dough in thier own privately held companies. I’m just saying that the people responsible for compensation oversight at many large publicaly held companies are really dropping the ball...or are screwing over the investors they are supposed to represent for thier own private benefit.
We’ve got to get passed the myth that top level exec’s are rocket scientists.... a few are.... but most have about the same level of managment talent that a shift manager at Burger King does (and some considerably less).... many just happened to be at the right place at the right time, the right persons nephew or drinking buddy or got sent to the right prep school. That’s the reality of the situation for MANY (not all) of them.
I'm not defending the practice entirely, but for some companies, taking the helm as CEO is a huge professional risk. For some large companies (think GM), their current problems have built up over decades of mismanagement. Is it fair to believe that ANY person could come in and right a ship that lost?
So let's say someone comes in to play CEO, but they find out the company's board of directors is part of the blame--or that unions are so deeply entrenched that nothing can get done? The CEO calls it quits after a year, but where can they go after that?
Some of these "golden parachutes" are outrageous, and I agree with a "pay for performance" approach, but I can also see the professional risk involved.
It should be. There is no 'risk' with the golden parachutes these guys are getting.
I'm not talking about the guy who comes into a failing company and makes improvements but doesn't work miracles. I'm talking about the guy who runs a company into the ground himself.
It's happened plenty of times, but the guys still come out of it with sufficient money that they'd never have to work again.
As a stockholder, that is unacceptable to me. I vote based on that belief, but too many don't.
I see that you’re familiar with corporate “doings”. I couldn’t agree more. These modern corporate “leaders”, who have no loyalties or morals, are doing nothing more than creating Democrats. A bunch of greedy pigs paying each other off at the expense of the “peons”.
Unfortunately, the stockholders allow such excesses. They are as ignorant as the typical voter.
I think CEO’s are generally overpaid and not worth the cost. But that is the shareholders business not mine. I do respect Costco’s CEO for having a very low salary comparatively. I do not agree with some of Costco liberals causes but I do respect the integrity it appears to have by taking good care of their employees. It is a great business model.
Vast majority of top tier corporation CEO's receive no salary at all. They are paid strictly on performance. The severance package is determined by the board of directors and is not part of the original employment package. Companies must pay the prevailing rate to attract top tier employees. Japan and Europe put limits on what their CEO's can earn and that's why none of the top talent from America is ever running to those places for a job. It is also why the most successful companies on the planet are American based.
LOL, and the basis for this utterly ludicrous statement is......?
“LOL, and the basis for this utterly ludicrous statement is......?”
Personnal experience. I’ve seen a fair number of these guys in action, up close and personal.
Just as an example, I remember one instance a few years back when we demonstrated to one VP that at the price he set it cost us more to produce each unit of goods sold then we were charging for it, he replied with a straight face.... “Yes, I know we are loosing money on each sale, but we’ll make up fo it in VOLUME”. That guy is a Pres. today.
I’d like to be able to say that sort of thing is an abberation.... unfortunately I’ve seen enough to know it’s not. Often as not companies succede IN SPITE OF THEIR Senior management team, not because of them. I’m not saying that they are all incompetent...just that alot of them are.... and still get multi-million dollar compensation.
Most, people that have first hand experience with this level of management KNOW this to be true. Senior Exec’s and thier compensation advisors LOVE to propagate the MYTH that it takes some incredibly rare level of skill to do the jobs that they do.... it’s just not the case. Usualy getting into that level of position has more to do with WHO you know then with WHAT you know.
amen to that. I can’t believe how many people on this board know nothing about the corporate boardroom, get F-ed over by these people, and then rush to defend them? Why?
Just another example of something that makes the average American extremely angry, and the Republican party does nothing about.
It’s gonna a long next couple of decades until the GOP learns to be accountable to the people again.
Got any examples? I can't say I've ever heard of that.
They are paid strictly on performance.
Well, supposedly. And I've never heard of a CEO whose golden parachute got taken away if they tank the company.
Our former CEO was 'asked' to leave by the board because of some ethics issues, and he got such a great package he never has to work again if he doesn't want to. Anyone else would have been tossed out on their ear.
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