OK. This will be short
Twigg's diary yesterday alerted me to how venal, capricious and frankly criminal certain financial institutions were in the US (yes I'm talking about you BOA) and while things are still about to get a lot worse here in the UK, this stunning story about the 'Anglo Saxon Model' just had me spinning
Revealed: huge increase in executive pay for America's top bosses
Exclusive survey shows America's CEOs enjoyed pay hikes of up to 40% last year – with one chief executive earning $145m
Chief executive pay has roared back after two years of stagnation and decline. America's top bosses enjoyed pay hikes of between 27 and 40% last year, according to the largest survey of US CEO pay. The dramatic bounceback comes as the latest government figures show wages for the majority of Americans are failing to keep up with inflation.
America's highest paid executive took home more than $145.2m, and as stock prices recovered across the board, the median value of bosses' profits on stock options rose 70% in 2010, from $950,400 to $1.3m. The news comes against the backdrop of an Occupy Wall Street movement that has focused Washington's attention on the pay packages of America's highest paid.
The Guardian's exclusive first look at the CEO pay survey from corporate governance group GMI Ratings will further fuel debate about America's widening income gap. The survey, the most extensive in the US, covered 2,647 companies, and offers a comprehensive assessment of all the data now available relating to 2010 pay.
Last year's survey, covering 2009, found pay rates were broadly flat following a decline in wages the year before. Base salaries in 2009 showed a median increase of around 2%, and annual cash compensation increased just over 1.5%. The troubled stock markets took their toll, and added together CEO pay declined for the third year, though the decrease was marginal, less than three-tenths of a percent. The decline in the wider economy in 2007, 2008 and 2009 far outstripped the decline in CEO pay.
Now I'm sure most of you know the following facts:
1. Real Median Wages of US workers haven't improved since 1997
2. During its most productive era, circa 1955 to 1970, the CEO to average worker pay was about 20:1
3. Even before these figures were produced, that ratio had increased around 2007 to around 70:1
Bob Swern alerted us this morning to a fantastic Joseph Stiglitz Vanity Fair Piece (yes he who emphasised the 99 versus the 1 percent that Obama referred to earlier this year).
Read the essay and weep. The banking crisis is just a symptom of a wider structural problem, which no amount of quantitative easing can solve.
Something's rotten in the state of neoliberalism.The liquidity and solvency issues both in the US and in the Eurozone reflect a deeper malaise. A lot of this is attributable to inequality. None of these extra salaries can conceivably be rewards for better performance. Nor can they help to increase demand in economies which are already zombie like.
And, as The Spirit Level proves, the more unequal a society, the less productive.
As I've often said, if Obama wants re-election, he should push further on this theme of the dwindling middle classes, and aim to break many of those cartels and modal monopolies that keep the super rich in control.
Only more democracy and wider sharing of wealth will get us out of this hole