CEOs get paid 273 times more than you do
A new report says top execs' compensation has rocketed by 875% from 1978, while the average American's paycheck grew just 5.4%.
Here's a lesson for today's kids. If you want to get ahead in life, it helps to be a chief executive of a major U.S. corporation.
The CEOs of the country's 350 top companies earned average compensation of $14.1 million in 2012, including the value of stock options exercised that year, the Economic Policy Institute reports in a new study.For average workers, that means their bosses are hauling in pay that's roughly 273 times their own, an income disparity that's far higher than the 1960s through the 1990s, the authors note. Even as recently as 1995, the ratio was only 123-to-1, while in 1965, it was a relatively meager 20-to-1.
How did CEO pay get so out of whack with ordinary workers?
The answer is that compensation for company's top dogs jumped by 875% between 1978 to 2012. By comparison, the average worker saw a "painfully slow" 5.4% growth in income during the same time period, the report noted (the EPI's figures are adjusted for inflation).
As the CNBC video above recounts, one recent stark example of sky-high pay is that of McKesson's (MCK) former CEO John Hammergren, who'll receive a record lump-sum pension payment of $159 million. His age? 54.
On top of that, Hammergren wasn't exactly poorly compensated during his 14 years as leader of the pharmaceuticals and health care products supplier, earning almost $400 million during that time, according to CNBC.
"In this case, one should understand better why a competent CEO in a pretty traditional industry should be rewarded so highly," John Sculley, a former CEO of Apple (AAPL), told the cable-news network. "What's a little bit strange is that he's 54 years old, and he would have had a discount on his pension because he was retiring before age 62. The board waived that. "
As high as it is now, CEO pay isn't as egregious as it was at its peak in 2000, when the ratio to average worker pay was 383-to-1.
Yet while the American dream appears to be alive and well for top executives, it's not so rosy near the bottom. Harvard professor Niall Ferguson, writing in The Daily Beast, questions whether rising inequality has killed the dream for much of America's workers.
The Federal Reserve's monetary policy since 2008, he writes, "has been to push up the price of assets. Guess what? The rich own most of these."
As the Economic Policy Institute report noted: "Those at the top of the income distribution, including many CEOs, are seeing a strong recovery while the average worker is still experiencing the detrimental effects of a stagnant labor market."
The bottom line: if you're a CEO, the recovery is going just fine. For the rest of American workers, not so much.
Follow Aimee Picchi on Twitter at @aimeepicchi.
When the CEO of Disney made 600 million in salary and God knows what in bonuses, he had children working in Haiti for 12 cents and hour. This is the insane greed that is destroying America. Our corrupt to the bone corporate and financial systems are a disgrace to the human race and they own both prostitute political parties.
We will force real change or be pushed into chaos and depression.
This is what people should be pissed about.I hear righties that want to eliminate the
minimum wage and these snakes can make millions for screwing up.Nikes` cost $200
bucks while the actual cost of making them is $10.The $190 goes to jocks commercials
and top management getting millions.
So that's basically 273 jobs that could have been created or funding for new produce creation. Yeah, I cry for the wealthy when they have to pay taxes of an effective 13% (what they really pay, not 34%). Us common workers have only seen a 5% pay increase! Wow management is screwing us over. The common worker does the grunt work, but the paper pusher gets the real pay. This is what is wrong with capitalism. The rich abuse the systems (tax, stock market, and political) to keep on getting richer.
This bunch of Thieves....(including the all sports players)...CEO's...even that they study hard in Universities....it's alright to get pay well, but not that real high...and..crooked way...because of them.....everything is so expensive to the average people....they're greedy and irresponsible!....no fair, whatsoever!
And what do you think who earns that money for them...us, the regular people who are strugling to make their ends meet every week...while at the same time all our freedoms are being taken away...slavery at its best..the whole planet is becoming the slave labor camp for 99% of population..
Revolution, the only solution!
P.S. I typed 'revolution' and 'freedom' in the same sentence...my oh my is NSA flagging this post right now...:)
Tie these fat pig's pay to the company's real value not just the stock price.
In determining their worth, figure in how much taxable income their employee base generates and include in that the taxes on profits the company feeds back into the local economy.
Keep stock options off the table when negotiating salary.
Include in the big shots compensation a factor that is tied to the number of employees earning above $50,000 per year wages.
Tax the living crap of these overpaid, do nothing, 1%ers at both local and state levels. Do not let the feds be responsible for getting the taxes out of the greedy air bags. They are the ones who put the greedy Federal politicians in their job in the first place.
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A basic income policy can actually ensure a decent standard of living for everyone.
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