Whopping Raises for Corporate Execs in 2010

Who got pay raises of 27 to 40% last year? The CEOs of America’s large corporations, according to a new study by GMI Ratings reported in the Guardian. Not just base salary, but pensions, perks and parachutes all increased for top U.S. execs; the ten biggest earning CEOs made a combined $770 million in 2010. For chief executives of S&P 500 companies, total compensation (including stock) increased by a median of 36.47%. CEO compensation was basically flat the year before, with base salaries in 2009 increasing by about 2 percent. In contrast, the average worker’s pay in 2010 barely kept up with inflation. The AFL-CIO calculates that the average CEO pay in the U.S. in 2010 was 343 times the median worker’s pay

The global recession did have some impact on big bankers’ paychecks: no financial professions are among the top 10 highest paid CEOs, while three of the ten are from the healthcare/pharmaceutical industries. The top “earner” was pharma company McKesson CEO John Hammergren, who made $145 million in 2010, mostly from stock options, which works out to a cool $276 for every minute in the entire year.

Sources differ on specific amounts, but CEO salary and benefits packages are staggering as executives seem to compete for the most lavish packages. According to the GMI study, Ronald Williams, CEO of health insurer Aetna, made $57.8 million in 2010 (USA Today reported that Williams’ pay and stock for 2010 amounted to $68.7 million.) The Guardian notes, “Aetna’s stock price declined by 70% from when Williams assumed the role of CEO in February 2006 until his retirement” in 2010. Last June Williams was appointed to  the Compensation & Benefits Committee at Johnson & Johnson; one can only wonder how his view of appropriate compensation levels will affect that company. A GMI study from this fall identified Aetna as one of the worst scoring companies in a survey of the quality of compensation policy and pay practices at S&P 500 corporations.

Not Trickling Down to Pay or Hiring

Well  compensated or otherwise, most CEOs do not expect to be paying any more workers next year. The latest report from the Business Roundtable (CEOs of large US companies) shows that only about a third of its members plan to create jobs in 2012 and 24% expect to cut jobs, with  42% expecting no change in their workforce size.

Disclosure Rules Delayed

Provisions of the Dodd Frank Wall Street Reform and Consumer Protection Act will require companies to compile and make public  a pay ratio, comparing  CEO pay to  the average employee’s salary. The provisions have been contested by corporate interests, who say the ratio is costly to compile and not as relevant as a pay versus performance disclosure. Last July, the SEC delayed the executive compensation rules, meaning they will not be in effect until late 2012.

 

 

Image by Pavel Losevsky via Dreamstine

123 comments

Eternal Gardener
Eternal Gardener4 years ago

Yes and it's a bloody whopping CRIME!!!

Vivianne Mosca-Clark

Trolls are out an about I see.

Getting paid $276.00 pre minute !!??

and the trolls are ok with that!! ?? hummmm wonder what they are making.........

Nancy L.
Nancy L.4 years ago

I don't see anything wrong with paying CEOs what they're worth. The govt. shouldn't have anything at all to do with what a private company decides to pay its leaders. Ever.

Deanna J.
Deanna J.4 years ago

...to be completely honest, if I think about this too much, I will become physically ill.

Do these people see what they are doing to others, in order to have MORE money? I hope they are made to understand how many have suffered and exactly how. Normally I'm not one to believe in "an eye for an eye" or wishing other people ill, but these people honestly deserve to suffer in the exact way that so many others have suffered due to the greed of these few.

Glenn M.
Glenn Meyer4 years ago

Diane O. said,

"It is not for any of us to decide what private corporations pay their CEO's. That's for their Board of Directors to evaluate and decide based on the profits generated in a given year. The government should never have any intervention in private salaries and quite frankly I don't believe the US will ever attempt to walk down that road. Because if they do, we'll see more and more large corporations take their business overseas and I wouldn't blame them if they did."

That just goes to show how UN-AMERICAN you are, besides most corporations are already foreign corporations already. They produce in communist countries and keep their money in foreign bank accounts and don't pay their taxes as a truly AMERICAN company would.

"We have to be very careful to nurture and reward companies for staying on US soil."

So the Corpublicans don't require corporations to tax off-shore production as it should be since it amounts to tax avoidance? The Corpublicans reward companies for taking production off-shore by creating incentives for them to do. How is that possibly nurturing companies to stay on U.S. soil? I guess you will have to stop voting for Corpublicans.

"Without them, millions and millions of jobs will be lost...forever.

They already are. Where have you been.

"So, to all who want to put a ceiling on what private companies pay their top brass just be careful what you wish for because your jobs could very easily disappear."

What a hollow thr

Bonnie m.
Bonnie mutchler4 years ago

Support OWS!!!!

Diane O.
Diane O.4 years ago

No, David, my feet are on the ground. I enjoy reality. I will absolutely agree with you that the subprime debacle crippled many blue states and red as well. Some of our southern states are are most always doing poorly whether they are blue or red. As far as Texas goes, Rick Perry has brought in the jobs, however, their numbers are always weak due to the high number of illegals in their state...i.e. school performance, high number of dropouts, high teen pregnancy. Over 70% of the babies born in our country today are latino babies. We also haven't had a recent study of the blue and red states to see where they stand economically although many of the red states have cut spending and have a surplus. Fortunately 26 states have denied ObamaCare in their states because they know the financial impact it will have and the cost cannot be sustainable. I hope more states will see the light and follow.

Marilyn L.
Marilyn L.4 years ago

Corporate CEO pay has been out of control for a very long time.

David C.
David Connally4 years ago

There's a good summary of CEO pay policies at http://www2.ucsc.edu/whorulesamerica/power/wealth.html

It's based on a report from Ed Woolard who was CEO of DuPont and who was appointed to review NYSE salary policies. He says something like CEO's get to specify their own salaries.

Incidentally Diane O is in lala land (as she usually is) when she assigns problems to state politics. One of the best predictors of how badly a state was hit by the housing bubble is - wait for it - how much house prices rose in the bubble.

On "states are thriving" quite a few red states are below the middle in the unemployment league table - October data - like Texas, Alabama, Kentucky, Tennessee, Georgia, Florida, South Carolina, Mississippi.

Marianna B M.

noted