Tag: CEO pay

Why Has The U.S. CEO-To-Worker Pay Ratio Increased So Much?

Authored by Jesse Colombo via Forbes.com,

MarketWatch recently published a piece about the soaring U.S. CEO-to-worker pay ratio, which hit 278-to-1 in 2018 (up from just 58-to-1 in 1989 and 20-to-1 in 1965) –

Nice work if you can get it.

CEO pay has increased 1,008% between 1978 and 2018, while typical worker pay has edged up 12%.

That’s according to analysis from the left-leaning Economic Policy Institute, providing new data on the depth of income inequality.

In 2018, CEOs in the country’s top 350 businesses were paid $17.2 million on average. Employees working in those industries — ranging from retail to technology and manufacturing — typically earned $64,500, researchers said.

Overall, there’s a 278-to-1 pay ratio between workers and CEOs. In 1989, the compensation ratio was 58-to-1 and in 1965, it was 20-to-1.

Stock awards and cashed-in stock options averaged $7.5 million of CEO pay in 2017 and 2018, the study added.

Incorporating stock in pay arrangements is one way to incentivize CEO, and rising salaries illustrate the market for talent in the C-suite, some observers say.

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COMFORTABLY NUMB (Oldie but Goodie)

Originally published in November 2011.

Hello?
Is there anybody in there?
Just nod if you can hear me.
Is there anyone at home?
Come on, now,
I hear you’re feeling down.
Well I can ease your pain
And get you on your feet again.
Relax.
I need some information first.
Just the basic facts
Can you show me where it hurts?

Pink Floyd – Comfortably Numb

As I observe the zombie like reactions of Americans to our catastrophic economic highway to collapse, the continued plundering and pillaging of the national treasury by criminal Wall Street bankers, non-enforcement of existing laws against those who committed the largest crime in history, and reaction to young people across the country getting beaten, bludgeoned, shot with tear gas and pepper sprayed by police, I can’t help but wonder whether there is anyone home. Why are most Americans so passively accepting of these calamitous conditions? How did we become so comfortably numb? I’ve concluded Americans have chosen willful ignorance over thoughtful critical thinking due to their own intellectual laziness and overpowering mind manipulation by the elite through their propaganda emitting media machines. Some people are awaking from their trance, but the vast majority is still slumbering or fuming at erroneous perpetrators.

Both the Tea Party movement and the Occupy Wall Street movement are a reflection of the mood change in the country, which is a result of government overreach, political corruption, dysfunctional economic policies, and a financial system designed to enrich the few while defrauding the many. The common theme is anger, frustration and disillusionment with a system so badly broken it appears unfixable through the existing supposedly democratic methods. The system has been captured by an oligarchy of moneyed interests from the financial industry, mega-corporations, and military industrial complex, protected by their captured puppets in Washington DC and sustained by the propaganda peddling corporate media. The differences in political parties are meaningless as they each advocate big government solutions to all social, economic, foreign relations, and monetary issues.

There is confusion and misunderstanding regarding the culprits in this drama. It was plain to me last week when I read about a small group of concerned citizens in the next town over who decided to support the Occupy movement by holding a nightly peaceful march to protest the criminal syndicate that is Wall Street and a political system designed to protect them. My local paper asked for people’s reaction to this Constitutional exercising of freedom of speech and freedom of assembly. Here is a sampling of the comments:

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IT’S HARD WORK BUYING BACK YOUR OWN STOCK

U.S. CEOs have it really tough. Their job is to never give workers more than a 2% raise, not make capital investments in their business, raise prices on their goods by making the products smaller or using inferior materials, outsource anything possible to the Far East, borrow at ridiculously low interest rates from Wall Street criminal banks, use the debt to buy back their company stock thereby pumping up earnings per share, and pay themselves 331 times more than their average worker. It also helps if you have an Ivy League degree, are a born psychopath, have no social empathy, and can lie with a straight face.

US CEO-Worker Pay Gap Is Widest In Developed World

Tyler Durden's picture

Submitted by Tyler Durden on 03/26/2015 12:20 -0400

Not too long ago we solved the mystery of America’s missing wage growth by pointing to the fact that wage growth for the country’s “non-supervisory” workers was in fact headed in the wrong direction, while America’s bosses were seeing their pay increase. We went on to note that with the correlation between consumer spending and wage growth now nearly perfect, the US economy could well suffer given that non-supervisory workers account for four-fifths of total employment and consumer spending accounts for three fourths of GDP.

If you needed further evidence of the disparity in compensation for America’s bosses versus what everyone else makes, look no further than the following chart from Bloomberg which shows that the pay gap between CEOs and workers is wider in America than in any other country in the developed world — and wider by a lot.

More from Bloomberg:

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KNOW YOUR ENEMY

“The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.”

Lord Acton

Morgan Stanley and Goldman Sachs Corp. are considered broker-dealers by SNL and so did not make the list. But if added back in, Lloyd Blankfein would have beat out everyone for the top spot with compensation of nearly $20 million. Morgan Stanley CEO James Gorman made $14.4 million last year and would have squeezed into the number 7 spot, above Moynihan.

In 2013, the median total for CEOs at 617 banks rose by 48% from 2009.

PAY FOR PERFORMANCE

The median CEO pay is now over $10 million per year, with banking and media oligarchs “earning” $20 to $40 million per year. CEOs are treated like rock stars. The same asshole banker CEOs who destroyed the global economy in 2008 are now rewarded with tens of millions because the Fed gives them billions at 0% and assures them they can take any risk without worrying about future losses. They rig the stock market and act like they deserve every penny of their compensation.

Take a long hard look at the chart below. At the peak of the stock market in 2007/2008, these bozos were buying back their own stock at an all-time high of $120 billion per quarter. So they were buying high. When the market was reaching bottom in early 2009 when stock prices were 50% lower, they were buying back 80% less of their stock. Isn’t the idea to buy low and sell high? These nitwit CEOs are nothing more than lemmings. The market is now at all-time highs again and these overpaid boneheaded idiots have obliterated their previous buyback high by buying back $160 billion of their own stock.

I’m sure this will be a fantastic investment. Someone should give them a raise. Of course, most of their compensation is now in stock and the buybacks boost EPS. Why would they spend money expanding their business and investing in people and capital? That’s old school thinking. These highly educated CEOs make 257 times the average worker, so they must know better. Right?

And so it goes.

 

According to a new study by the AP, the median pay package for a CEO rose above eight figures for the first time last year. The head of a typical large public company earned a record $10.5 million, an increase of 8.8 percent from $9.6 million in 2012, according to an Associated Press/Equilar pay study.

The study details:

  • Last year was the fourth straight that CEO compensation rose following a decline during the Great Recession. The median CEO pay package climbed more than 50 percent over that stretch. A chief executive now makes about 257 times the average worker’s salary, up sharply from 181 times in 2009.
  • CEO comp has risen 50% over the past five years, and was up 8.8% in 2013. By comparison, the income of the US middle class has declined over this time period.
  • The average CEO now make 257 times the average worker’s salary, up 41% since 2009.
  • The industry with the biggest pay bump was banking. The median pay of a Wall Street CEO rose by 22 percent last year, on top of a 22 percent increase the year before. BlackRock chief Larry Fink made the most, $22.9 million. Kenneth Chenault of American Express ranked second with earnings of $21.7 million.
  • Media industry CEOs were, once again, paid handsomely. Viacom’s Philippe Dauman made $37.2 million while Walt Disney’s Robert Iger made $34.3 million. Time Warner CEO Jeffrey Bewkes earned $32.5 million.