Even as the U.S. economy went into a tailspin, the median salary for CEOs of 200 large corporations increased by 4.5 percent to $1.08 million. On top of that, these corporations keep plying executives with generous freebies, despite the public outcry over private jets and other executive perks.
The 2009 AFL-CIO Executive PayWatch site, which launches today, points out that the perks for executives rose on average by 12.5 percent in 2008 to $336,248—or nine times the median salary of a full-time worker. Even more appalling is the practice of rewarding executives who drive their companies into the ground.
For example, the site reports that in 2007—the year the financial crisis began to unfold—the top 10 recipients of the federal government’s Troubled Asset Relief Program (TARP) collectively paid their CEOs a combined $242 million in total annual compensation. That averages nearly $25 million per CEO to run companies that might have gone bankrupt if not for billions of dollars in taxpayer assistance.
The PayWatch site also features an e-mail action. Click here to send a letter to Rep. Barney Frank (D-Mass.) and Sen. Christopher Dodd (D-Conn.), chairmen of the House Financial Services Committee and the Senate Banking, Housing and Urban Affairs Committee, respectively. Let them know we’re counting on them to draft legislation that truly strengthens our financial regulations and begins curing the disease that has infected our economic system.
Here are other prime examples in the case studies of corporate failure:
- While retirees worry over the fate of Deere & Co.’s pension surplus, which is shrinking because of stock market losses, the value of Deere CEO Robert Lane’s retirement income increased $5.5 million in fiscal 2008 to $22.5 million. Lane and other senior executives participate in not one but three different pension plans.
- SunTrust Bank, which received $4.9 billion from the federal bailout fund, wants shareholders to approve a mega-grant of $7.7 million in stock options for James Wells, its chairman and chief executive officer, even as investors have lost billions.
- While workers who are laid off in these tough economic times are lucky if they receive anything more than their last paycheck, Richard Bond, who retired as CEO of Tyson Foods in January, stands to collect more than $14 million in “golden parachute” severance payments.
Want to know what your CEO made last year? The Executive Paywatch site offers three user-friendly ways to find out. And if you want to have a little fun at the CEO’s expense, play the “Boot The CEO” game and kick the money out of the greedy CEO’s hands.
Their arrogance knows no bounds:
In 2008, despite the worst economic meltdown in over 75 years, U.S. chief executives continued to take home over 300 times more pay than their workers. That’s a gap ten times wider than the gap between top execs and workers that existed just a generation ago.
Corporate boards of directors seem determined to keep this massive gap intact. Most corporations are refusing to make even symbolic gestures toward more common-sense executive compensation.
Remember last fall’s firestorm over executive jets? In 2008, over half America’s big corporations — 104 of the 200 the Wall Street Journal tracked — continued to foot the bill for the personal air travel of their top executives, only three fewer than the year before.
CEOs have to report the personal air travel subsidies they get, along with whatever other perks they receive, as taxable income. Over a third of America’s biggest corporations last year actually gave their executives extra money to pay the taxes on all this perk income.
The dollars devoted to this tax reimbursing — or “grossing up,” as power suits refer to the process — averaged $16,400 last year. That sum might not sound like much, given the millions CEOs take home overall, but, in 2008, average American workers had to labor five months to make $16,400.
The Wall Street Journal doesn’t include perks like free air travel and tax gross-ups in its $7.6 million figure for 2008 CEO “direct compensation.” The New York Times $8.4 million total does.
Neither paper’s pay totals for 2008 include the gains CEOs registered last year cashing out the stock options they collected in previous years. These cashouts generated some staggering personal paydays.
Occidental Petroleum’s Ray Irani, for instance, took home $49.9 million in “total direct compensation,” according to the Wall Street Journal figures. But he gained another $215.9 million in 2008 from options and other long-term “incentives” that Occidental had stuffed in his personal portfolio before last year.
Corporate boards have essentially created what amounts to a perpetual motion pay machine that year in and year out gins up millions in executive compensation, no matter what may be happening economically in the real world.
In “good” times, with revenues and profits up, boards hand executives stock awards and cash bonuses as rewards for their fine “performance.” In hard times, boards keep the stock awards coming — as an incentive to stick around and perform better in the future.
And thus continues the delusion that the wealthy are the most productive members of society which requires that they be allowed to dictate the terms by which the burden of their failure and mismanagement is borne by others.
The corporate aristocrats are working hard to keep the rubes focused on the big, bad gummint because if they ever realize just how thoroughly they've been scammed by these Masters of the Universe, who knows what might happen?