Revealed: Huge Increase in Executive Pay for America's Top Bosses

[one...two...tree 2,762]

Exclusive survey shows America's CEOs enjoyed pay hikes of up to 40% last year – with one chief executive earning $145m

by Dominic Rushe

Chief executive pay has roared back after two years of stagnation and decline. America's top bosses enjoyed pay hikes of between 27 and 40% last year, according to the largest survey of US CEO pay. The dramatic bounceback comes as the latest government figures show wages for the majority of Americans are failing to keep up with inflation.

John Hammergren, CEO of healthcare provider McKesson, earned $145m last year. (Photograph: George Nikitin/AP)

America's highest paid executive took home more than $145.2m, and as stock prices recovered across the board, the median value of bosses' profits on stock options rose 70% in 2010, from $950,400 to $1.3m. The news comes against the backdrop of an Occupy Wall Street movement that has focused Washington's attention on the pay packages of America's highest paid. The Guardian's exclusive first look at the CEO pay survey from corporate governance group GMI Ratings will further fuel debate about America's widening income gap. The survey, the most extensive in the US, covered 2,647 companies, and offers a comprehensive assessment of all the data now available relating to 2010 pay.

Last year's survey, covering 2009, found pay rates were broadly flat following a decline in wages the year before. Base salaries in 2009 showed a median increase of around 2%, and annual cash compensation increased just over 1.5%. The troubled stock markets took their toll, and added together CEO pay declined for the third year, though the decrease was marginal, less than three-tenths of a percent. The decline in the wider economy in 2007, 2008 and 2009 far outstripped the decline in CEO pay.

This year's survey shows CEO pay packages have boomed: the top 10 earners took home more than $770m between them in 2010. As stock prices began to recover last year, the increase in CEO pay outstripped the rise in share value. The Russell 3000 measure of US stock prices was up by 16.93% in 2010, but CEO pay went up by 27.19% overall. For S&P 500 CEOs, the largest companies in the sample, total realised compensation – including perks and pensions and stock awards – increased by a median of 36.47%. Total pay at midcap companies, which are slightly smaller than the top firms, rose 40.2%.

GMI released a preliminary report on 2010 CEO pay earlier this year, before all the data was available. Paul Hodgson, a senior research associate at GMI, said that report had shown a significant bounce but he had expected a wider sample to dampen the effect.

"Wages for everybody else have either been in decline or stagnated in this period, and that's for those who are in work," said Hodgson. "I had a feeling that we would see some significant increases this year. But 30-40% was something of a surprise." Bosses won in every area, with dramatic increases in pensions, payoffs and perks – as well as salary.

http://www.commondre...e/2011/12/14-11

[Bad_Daddy 2,209]

This ####### happens all the time. Golden parachutes, bonuses, pay hikes, vacations on the companies dime...even bonuses with tax payer funded bail out money. Then when the well is dry, they pick up and move to a third world country where they can bypass any and all labor laws while making a fat ol profit and avoid paying taxes. Yet the tools and wannabee slaves will cry, p*ss and moan saying the unions make too much money. Funny thing though is the unions have taken pay cuts year after year and on several occasions purchased stock in a dying company to keep it afloat all the while the white shirts where still giving themselves big fat bonuses trying to make the ship sink all that much faster.

Yay for the suits. Some of the biggest thieves this country has ever known.

[Gary and Alla 3,694]

Good news. If you want them to pay the taxes, they have to have money to do it.

The last thing I want is a maximum wage.

[Bad_Daddy 2,209]

Good news. If you want them to pay the taxes, they have to have money to do it.

The last thing I want is a maximum wage.

If they can afford to give themselves those kinds of bonuses they must have money coming from somewhere. The ball breaker is when they give themselves those bonuses even when their companies are tanking due to the fact they ran them into the ground with p*ss poor management. I'm starting to think the school boys from those spendy Ivy League schools never took any accounting classes.

[Misha & Ira 113]

Another mindless shill thread promoting wage envy. Crab mentality at its finest on display here. Intelligent discussion...pfff...

I have an idea....rather than using your evenings posting drivel, maybe you could use the time to earn a degree....start a business of your own....something useful that generates an income and takes your mind off the success of others?

Just a thought...

Exclusive survey shows America's CEOs enjoyed pay hikes of up to 40% last year – with one chief executive earning $145m

[slim 1,525]

What's funny to me is the people b!tching about these guys making too much money are claiming they need more money themselves. Hypocrisy much?

[SMR 368]

Good news. If you want them to pay the taxes, they have to have money to do it.

The last thing I want is a maximum wage.

I'm economically conservative myself and don't want to see a maximum wage. But at the same time, I think there is a misconception about what a CEO is. A CEO is not a business owner and typically has no skin in the game (stock options don't count because he loses nothing when they tank). He or she frequently didn't innovate to start a new business and didn't and doesn't cause growth. A CEO is an executive officer hired by the shareholders to run the business: a manager, not an owner. His or her sole purpose, in a theoretical model, is to create shareholder value, either by increasing dividends or raising the stock price.

While this is obviously an important position that requires a skilled individual, it's not reasonable to expect that one individual can predictably create $20 or $30 or $50 million in value, year after year. That is, you can almost certainly find someone who will do just a good a job that will do it for $500k to a million. But the boards of directors and CEOs or the largest companies in the US make up a good, old boys club that protects and lubricates the pockets of its own.

In short, I have no problem with a business owner making however much his business can make, provided it's legally done. But when a CEO is making $100 million a year for managing a company and has nothing to lose and has himself created nothing, that's ridiculous. And when you talk about large companies in the US, you're talking about everybody with a 401k or other type of pension or retirement fund. We're all the shareholders that are paying these exorbitant salaries.

[Gary and Alla 3,694]

I'm economically conservative myself and don't want to see a maximum wage. But at the same time, I think there is a misconception about what a CEO is. A CEO is not a business owner and typically has no skin in the game (stock options don't count because he loses nothing when they tank). He or she frequently didn't innovate to start a new business and didn't and doesn't cause growth. A CEO is an executive officer hired by the shareholders to run the business: a manager, not an owner. His or her sole purpose, in a theoretical model, is to create shareholder value, either by increasing dividends or raising the stock price.

While this is obviously an important position that requires a skilled individual, it's not reasonable to expect that one individual can predictably create $20 or $30 or $50 million in value, year after year. That is, you can almost certainly find someone who will do just a good a job that will do it for $500k to a million. But the boards of directors and CEOs or the largest companies in the US make up a good, old boys club that protects and lubricates the pockets of its own.

In short, I have no problem with a business owner making however much his business can make, provided it's legally done. But when a CEO is making $100 million a year for managing a company and has nothing to lose and has himself created nothing, that's ridiculous. And when you talk about large companies in the US, you're talking about everybody with a 401k or other type of pension or retirement fund. We're all the shareholders that are paying these exorbitant salaries.

You are not economically conservative and I have no misconceptions about CEOs, the first sentence of your post contains the "butt monkey" which negates every word before "But"

Please do not suggest I posted in ignorance.

Shareholders can vote at annual meetings and get an annual report that shows that person's salary. If you do not like it...fire him! Cut his pay and let him quit! You canm do this ALL BY YOURSELF. These people are employed by private business and they do not need the government to tell them what to pay the executives of the business THEY own. Be serious.

In fact the government would be the LEAST effective way to control salaries and benefits.

But I like hpw they say "make the 1% pay!" and then try to KILL the 1% I guess there will always be the "top 1%" and they will not be happy until they make minimum wage plus $1 per hour also.

This is simply ridiculous tripe.

Edited December 15, 2011 by Gary and Alla

[SMR 368]

You are not economically conservative and I have no misconceptions about CEOs, the first sentence of your post contains the "butt monkey" which negates every word before "But"

Please do not suggest I posted in ignorance.

Shareholders can vote at annual meetings and get an annual report that shows that person's salary. If you do not like it...fire him! Cut his pay and let him quit! You canm do this ALL BY YOURSELF. These people are employed by private business and they do not need the government to tell them what to pay the executives of the business THEY own. Be serious.

In fact the government would be the LEAST effective way to control salaries and benefits.

But I like hpw they say "make the 1% pay!" and then try to KILL the 1% I guess there will always be the "top 1%" and they will not be happy until they make minimum wage plus $1 per hour also.

This is simply ridiculous tripe.

Are you aware of exactly what stocks are in your portfolio, 401k, pension fund, etc.? Have you ever been to a shareholder meeting? Do you have the ability to easily buy and sell individual stocks in your portfolio? Do you really have any influence on the board of directors of any major corporation in America? Even if you can answer "yes," to some or all of these questions, I imagine that many can't. While what you are suggesting may be possible, that doesn't mean it's a reasonable option for most people.

I don't agree with the 1% argument and don't think that the government should intervene directly. I don't think that we need to tax the rich more. I do think that we need to get away from the idea that is perpetuated by many on the right that the free market is doing just fine and making sure that everyone is paid what they are worth. If you look at the numbers as well as the relationships that exist among the rich (particularly those that are rich through managing and running other peoples companies and money), the compensation is determined more by quid pro quo, connections, and an ever increasing status quo, than by anything resembling a free market with competition and supply and demand.

Again, I'm not saying the government should intervene. But I do think that we need to become more aware of these situations instead of turning a blank eye to them and assuming the market is taking care of it. A truly free market lends itself wonderfully to fraud, money laundering, back room deals, bribes, and even outright theft. If the people taking part in the free market are not well informed, educated, and paying attention, those things become more prevalent. The invisible hand doesn't have eyes, so somebody else needs to be watching.

[Bad_Daddy 2,209]

I like the way the Japs do it. If their company is tanking the suits take pay cuts, and when things are going good they give themselves raises but they keep it real by not getting greedy. No golden parachutes, no 7-8 figure bonuses. I'm not just taking about the CEO's but the top level suits in general. In stead of the "I want mine mentality", they look further down the road as to whats best for the company in general.

It's like the auto manufactures in the US. The suits gave themselves giant bonuses yet with their great management skills they managed to fall further and further behind the Japs and Germans year after year in technology and marketing by engineering shoddy products.

[slim 1,525]

Are you aware of exactly what stocks are in your portfolio, 401k, pension fund, etc.? Have you ever been to a shareholder meeting? Do you have the ability to easily buy and sell individual stocks in your portfolio? Do you really have any influence on the board of directors of any major corporation in America? Even if you can answer "yes," to some or all of these questions, I imagine that many can't. While what you are suggesting may be possible, that doesn't mean it's a reasonable option for most people.

Don't share holders have the right to pull their money whenever they see fit?

Don't like a companies policies... don't give them capital!

[SMR 368]

Don't share holders have the right to pull their money whenever they see fit?

Don't like a companies policies... don't give them capital!

Back to my original questions that you commented on. Yes, in theory, you can pull your money whenever you see fit. But a large portion of people that own stocks do so through funds, plans, and other vehicles. That means that most of them don't even know what stocks they own. And they almost certainly don't know the salaries and compensation packages of the executives of those unknown companies. And due to the structure of the vehicles through which they own stock, it's not a simple case of getting rid of one stock and picking another, even if they did figure out which companies had executives that were abusing the situation. Those situations are being investigated by and the decisions are being made by fund managers, who are often in bed with the CEOs and members of the boards of directors.

[Bad_Daddy 2,209]

Back to my original questions that you commented on. Yes, in theory, you can pull your money whenever you see fit. But a large portion of people that own stocks do so through funds, plans, and other vehicles. That means that most of them don't even know what stocks they own. And they almost certainly don't know the salaries and compensation packages of the executives of those unknown companies. And due to the structure of the vehicles through which they own stock, it's not a simple case of getting rid of one stock and picking another, even if they did figure out which companies had executives that were abusing the situation. Those situations are being investigated by and the decisions are being made by fund managers, who are often in bed with the CEOs and members of the boards of directors.

Well said.

[slim 1,525]

Back to my original questions that you commented on. Yes, in theory, you can pull your money whenever you see fit. But a large portion of people that own stocks do so through funds, plans, and other vehicles. That means that most of them don't even know what stocks they own. And they almost certainly don't know the salaries and compensation packages of the executives of those unknown companies. And due to the structure of the vehicles through which they own stock, it's not a simple case of getting rid of one stock and picking another, even if they did figure out which companies had executives that were abusing the situation. Those situations are being investigated by and the decisions are being made by fund managers, who are often in bed with the CEOs and members of the boards of directors.

Why would anyone invest in something they don't know about?

[Bad_Daddy 2,209]

Why would anyone invest in something they don't know about?

Stock brokers.