CEOs earn 262 times pay of average worker

[vinnie]

NEW YORK (Reuters) - Chief executive officers in the United States earned 262 times the pay of an average worker in 2005, the second-highest level in the 40 years for which there is data, a nonprofit think-tank said on Wednesday.

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In fact, a CEO earned more in one workday than an average worker earned in 52 weeks, said the Economic Policy Institute in Washington, D.C.

The typical worker's compensation averaged just under $42,000 for the year, while the average CEO brought home almost $11 million, EPI said.

In recent years, compensation has been a hot issue with shareholders who have been bombarded with news stories about chief executives who are given multimillion dollar bonus and pay packages even if shares have declined.

For example, the chief executives of 11 of the largest companies were awarded a total of $865 million in pay in the last two years, even as they presided over a total loss of $640 billion in shareholder value, a recent study from governance firm the Corporate Library, found.

In 1965, U.S. CEOs at major companies earned 24 times a worker's pay. That ratio surged in the 1990s and hit 300 at the end of the recovery in 2000, according to EPI.

CEO pay is defined by the sum of salary, bonus, value of restricted stock at grant and other long-term incentives. Worker pay is hourly wage of production and nonsupervisory works, EPI said.

 

[dawgball]

I don't like how some CEOs are compensated, but the following quote is very suspect. What companies were included in the study?

while the average CEO brought home almost $11 million

 

[buddy]

There needs to be a labor strike in this country.

A lengthy one.

But, whatever we can't accomplish on our own, the illegal immigrants will accomplish for us.

They're united, have leadership and are unafraid.

 

[vinnie]

I don't like how some CEOs are compensated, but the following quote is very suspect. What companies were included in the study?

Not sure but the company I retired from went public and I got in on the IPO which was set at $20 until the day it was offered then they jacked it up to $25 the CEO still got his fill at $1 per share.

 

[dawgball]

Those are the things that I vehemently disagree with. When did that happen? I read in a magazine on the plane the other day on that subject and how it is really being cracked down on. If I remembered which magazine, I would post the link.

 

[Happy Hippo]

I don't like how some CEOs are compensated, but the following quote is very suspect. What companies were included in the study?

The average CEO of a Standard & Poor's 500 company made $11.75 million in total compensation in 2005, according to a preliminary analysis by The Corporate Library.


I was just reading an article about this in a british magazine last night - really interesting statistics... I'll have to find them... but here's a few that are disturbing to me...

At the 34 publicly traded US corporations among the 2004 top 100 defense contractors with 10% or more of their revenues from defense contracts ? companies such as United Technologies, Textron, and General Dynamics ? average CEO pay increased 200% from 2001 to 2004, versus 7% for all CEOs.

Since September 11, the ratio between median pay for defense CEOs and pay for military generals has nearly doubled to 23-to-1, up from 12-to-1 just three years earlier. The pay ratio between defense CEOs and army privates soared to 160-to-1, up from just 89-to-1 in 2001.

Just another way Bush & his CEO friends are profiting from the war in Iraq... while the poorer people are doing the actually fighting and suffering...

Fascism anyone? :shrug:

 

[TJBELL]

The CEO of Costco takes home only 12 times the average wage of full timers.

Unreal!

 

[dawgball]

Thanks for posting, Hippo.

 

[marine]

yup, and just remember - that CEO has spent his entire life educating himself and devoting his life to his job so that he can get to the top. You think a CEO of a defense contracting firm goes home after putting in his 8 or 9 hours at the office?

Sh*t no, even the folks 2 levels down from him are lucky to see their wives and kids 2 nights a week!

CEO's devote their entire friggin existence to that company. It's not a 9-5 job that you put your application in online for.

They are representing that entire organization! I sure hope my CEO is able to lead a lifestyle that allows him to focus on work and not having to worry about snaggletooth johnny his kid needing to get braces.

they take on a LOT of risk by taking that role. hence, they need to be rewarded as well.

As always, America hates a winner, so let's all pick on the CEO for being compensated fairly.

 

[vinnie]

yup, and just remember - that CEO has spent his entire life educating himself and devoting his life to his job so that he can get to the top. You think a CEO of a defense contracting firm goes home after putting in his 8 or 9 hours at the office?

Sh*t no, even the folks 2 levels down from him are lucky to see their wives and kids 2 nights a week!

CEO's devote their entire friggin existence to that company. It's not a 9-5 job that you put your application in online for.

They are representing that entire organization! I sure hope my CEO is able to lead a lifestyle that allows him to focus on work and not having to worry about snaggletooth johnny his kid needing to get braces.

they take on a LOT of risk by taking that role. hence, they need to be rewarded as well.

As always, America hates a winner, so let's all pick on the CEO for being compensated fairly.

George Bush is your CEO :142smilie :mj07: :142smilie

 

[marine]

hardy har har,

but no, he is not my CEO anymore. I've moved on past that stage in my life and in the defense contractor world.

and as the article fails to acknowledge, they are most likely looking at CEO's of Fortune 500 companies, and not Small Businesses
and, they fail to mention that the average expectancy for a CEO to hold that position is a few short years - typically 3.

CEO's know that going in - they might be brought in to turn a compmany around or something.
"Make hay while the sun shines"
CEO's burn out doing that job, or are replaced when things the "lowly paid employees" do go wrong. So that exorbarant salary is a reason for them to even consider the job.

Company: Hi, we'd like you to lead us, develop business strategy, take responsibility for business growth, brand us in the community, and oh yea - if some schmuck on your staff screws up a lil bit, we will terminate you for not keeping control of things.
We'd like to pay you the same amount as the guy on the floor pushing the broom who's only worry is where the empty garbage bags are. Yes, we will probably onnly keep you for 2 years and the broom pusher will do a full 30 years here with job security because he is union."

Potential CEO: oh gee, where do I sign up? As long as I can be at the bus stop by 6pm to make it home for my kid's softball game everynight I am all about this job.

 

[dawgball]

marine -- i am very pro-business and very pro-CEO, but some of the practices used are suspect at best. Backdating stock options, for one, is an example of something that was used very frequently and is basically stealing because they can look back and pick the date where they bought their stock. I am all for high compensation levels. I would like to see them more inline with performance sometime, but that is easier said than done. But I am not for unfair practices.

 

[Happy Hippo]

Took me awhile to remember where I read this... thought it was a British magazine, but I was wrong... Yeah - these CEOs are all about supporting their workers and the health of their business. :142smilie Gotta have your blood red pulpless orange juice.


From "Recon: Executive Perks", Mother Jones, November/December 2005 Issue:


**Last year, top executives got an average raise of 15%, while workers got 2.9%.

**23% of CEO pay?some $26 billion?is tied to cash bonuses.

**Among companies where execs get 92% or more of their pay in stock-option gains, about one-fifth will cook the books within five years.

**Wal-Mart's CEO earned $12.6 million in cash and $4.5 million in stock options last year; Costco's CEO got $578,000 in cash and $25.3 million in stock. Costco?s $16-an-hour starting wage?two-thirds more than Wal-Mart's average wage?has been criticized by Wall Street analysts as "overly generous."

**The president of Morgan Stanley quit after 15 weeks with $32 million, or $26,666 an hour, if he worked 80-hour weeks.

**Chief executives in the struggling auto industry have a median income of $4.2 million, up 72% from 2003.

**Viacom gave its top exec a 58% raise even as its stock fell 18% last year.

**Among the perks of the J. Paul Getty Trust?s CEO: a $72,000 Porsche SUV with the "biggest possible sunroof." Among his staff's duties: finding his wife "her Tropicana blood orange juice, no pulp, not from concentrate," which she "saw in Europe."

**Martha Stewart once expensed haircuts, coffee, snacks, and a $17,000 trip to Mexico.

**In 1997, Delta Air Lines agreed to pay its departing CEO a $500,000 annual "consulting salary" for eight years, on top of $4.5 million in severance, a company car, private-club dues, and a secretary.

**Jack Welch's perks from General Electric included wine, vitamins, and toiletries for life.