Bailed-out CEOs Pocket Millions, Lay off Hundreds of Thousands
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Executives of banks that were bailed out with taxpayer dollars have pulled down stock options that guarantee them mega-million-dollar windfalls for years to come.
Worse, they’re using our taxpayer money to line their own pockets while laying off workers. Since Jan. 1, 2008, the top 20 financial industry recipients of bailout aid have together laid off more than 160,000 employees. In 2008, the 20 CEOs at these firms each averaged $13.8 million in compensation, for a collective total of over $250 million.
According to a report by the Institute for Policy Studies (IPS), the top five executives at 10 of the top 20 banks that have accepted the most federal bailout dollars received a combined increase in the value of their stock options of nearly $90 million.
Says Sarah Anderson, lead author of “America’s Bailout Barons,” part of IPS’s Executive Excess series:
America’s executive pay bubble remains unpopped. And these outrageous rewards give executives an incentive to behave outrageously, putting the rest of us at risk.
CEOs Protected by Big Contracts Make Sure Their Employees Aren’t
The AFL-CIO’s new Executive PayWatch data shows that many CEOs and top execs have contracts that give them high pay, job security and numerous benefits. Yet these same executives are fighting a vicious battle to prevent their workers from having an opportunity to get workplace contracts by opposing passage of the Employee Free Choice Act.
A big double standard is at work here—corporations are giving generous contracts to top execs with one hand while suppressing workers’ freedom to form unions with the other.
Take Wal-Mart, one of the most active opponents of the Employee Free Choice Act and its workers’ freedom to form unions. Wal-Mart went so far as to warn store managers not to vote for Obama last fall, and former Wal-Mart CEO Lee Scott summed up corporate opposition to Employee Free Choice like this:
We like driving the car and we’re not going to give the steering wheel to anybody but us.
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.
