Monday, December 19, 2005
As Greg Farrell reports, CEO pay is skyrocketing as never before - both at companies that are doing well, and companies that are losing money. Whereas workers are regularly told to accept draconian pay cuts when the company faces financial trouble (think Delphi), CEO and top executives at these same companies are rolling in cash.
In a confidential letter written by major pension funds and obtained by the paper, we learn "that CEO pay at many companies in the Russell 3000 index (representing 99% of the U.S. stock market) bore no relation to how well those companies performed." Here's more:
"At 60 of the worst-performing companies in that group, which lost $769 billion in market value over the past five years, the aggregate pay for the top five executives of those 60 companies over the same period was $12 billion. In other words, since January of 2000, some 300 executives who were responsible for more than three-quarters of a trillion dollars in shareholder value vanishing were rewarded by their shareholders with salary, bonuses and stock options worth $12 billion. That averages out to $40 million for each of those companies' top five executives over the five-year period, or $8 million per executive per year."
full article @ sirota blog