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Executive PayWatch: CEO Perks Rise as Workers’ Wages, Jobs Wilt |
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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.
This year’s Executive PayWatch highlights 10 case studies that show the multiple ways CEOs profited big time, while the average worker could barely hang on. There is the well-known case of AIG, which has been kept afloat by more than $170 billion in federal assistance—about $1,500 for every household in the nation—and still paid out more than $500 million in salaries and bonuses to hundreds of senior employees.
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.
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For a further specific example of exactly how “Workers Wages, Jobs Wilt”, even among organized auto-workers, this article from WSWS some more details. This article (link below), with photos, contains interviews with affected workers
White House pushing GM toward bankruptcy
By Jerry White
14 April 2009
http://www.wsws.org/articles/2009/apr2009/auto-a14.shtml
“The Obama administration is aggressively pushing General Motors into bankruptcy, the New York Times reported Monday. The White House wants to use bankruptcy courts, the newspaper said, to break up the century-old industrial icon and sell off its profitable parts to private investors. Meanwhile, the company’s undesirable assets, including health-care and pension obligations, would be liquidated in drawn-out bankruptcy proceedings.”
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“The threat of bankruptcy is being used to extort unprecedented concessions from GM’s 60,000 hourly workers and 800,000 retirees and their dependents. If the United Auto Workers union fails to impose drastic wage and benefit reductions by May 31, then a bankruptcy judge will be brought in to do it.”
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“The president said the plan had not gone far enough and insisted on more “painful concessions” from auto workers. The president’s auto task force said the company would only be judged “viable” if it assured an “adequate return on capital” to Wall Street, under all conditions, even a severe economic downturn.”
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“The dismantling of the auto industry—which will provide another windfall for Wall Street—is undoubtedly part of the Obama’s administration economic “recovery” plan, which is designed to boost the fortunes of America’s financial aristocracy through the impoverishment of the working class.”
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Rewards for failure, Wall street economics at its best. CEO pay is of course not the only indicator of failed economics, but it does stand out as a problem.
Solutions: raise social security and medicare tax all the way up by removing caps. Solution two: make CEO pay “nondeductible” from all federal taxes if CEO pay more than 50 times the average pay for workers (including temps).
I believe good pay for hard work, but some things like “pay to fail” must be addressed if we ever wish to make a sound economy
I know that many on capitol hill might not wish to hit their buddies, but those opposing such should be reminded by the voters, no matter the party association.
As long as companies appoint CEO’s from other companies to their Boards to boost their status and credibility, we will forever be caught in the syndrome of CEO’s setting CEO’s salary/benefits packages.
If the auto industry is allowed to fail, it will be the largest and probably last great unionized organization to succumb to the unrelenting greed of corporate America. It is the CEOs who have allowed the auto industry to sink into bankruptcy. It is they who sought to build bigger, meaner gas guzzlers without considering that this nation must move in a better direction of energy efficiency and better quality.
This can change. We have the technology to change the auto industry and make it profitable and sustainable. We should not sacrifice this industry because egomaniacal CEOs and capitalists have caused it to fail.
The Wall street bailout was/is a disaster - no regulation, no rules, no accountability. Is it no wonder that the banks are continuing to reap (rape) massive profits from our government and the taxpayers. I have had enough!
It is high time that the remaining intelligent beings in Congress understand what needs to be done here. I find it hard to believe that they either just don’t get it, or they feel powerless to change it. I think President Obama is being pulled by so many single interest groups, and has so many things to deal with, thanks to the insane ineptitude of the Bush administration, that he is relying heavily on the counsel and expertise of his advisers. Are they steering him in the wrong direction, or is the fear of not achieving substantial goals because of Republican roadblocks, that our President and his well-intentioned Cabinet is at an impasse and will not be able to succeed no matter what is proposed.
I am angry because I can plainly see what President Obama wants for this country, yet I can also plainly see how many forces are working against him. I am angry because there are so many people out there who are more interested in their own fortunes and political posture, that they will stop at nothing to prevent a good idea or a positive and dare I say progressive formula for true growth and success to take root.
I am angry because common sense has been replaced by impatient, irrational thinking, and many, many people actually believe it is the auto industry that has caused all our problems to begin with, who believe that “union” is a dirty word because somehow their lives would be so much better if every single thing in our country is privatized.
Yes, I have had enough, because I am tired of the lies I hear, and the arguments for these lies that continue to place the blame on average hard working Americans who only want a better way of life and a better future for themselves and their children.
I blame Wall Street and the wealthy lobbyists that have convinced our government that de-regulation is what will make this country strong, and that the enormous wealth that top executives receive will “trickle down” to those working for their companies. Somewhere along the line someone actually believed this. Now, we have reached a point where the solution is no longer easy, yet those reponsible are pretending like there is no problem. As long as they continue to believe this, there can not be any progress. As long as those who control the money continue to believe that what is theirs is theirs and what should be mine (ours) is also theirs, we will not be able to get out of this.
It will take a strong government to get us back on the right track. I admire President Obama for everyhting he is attempting to accomplish. It is my only hope that those who oppose him stand by the sidelines and stay out of the way, so he could actually succeed in doing some good for this country.
Thank you for listening.