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Average worker salaries increased by about 2.8% in 2012, not even outpacing historically low inflation rates.  CEO pay at most companies increased by about 6% in the same time period.

But there was one group whose salary, bonuses, dividends, and stock options increased - CEO's of Wall St. banks and financial institutions. Their compensation went up by about 20% over the previous year. And who did even better than that? Managers of private equity firms whose pay increased by 30%

Average workers' salaries stayed essentially flat from 2011 to 2012

Employees will get an average increase of about 2.8% in 2012 on average, up slightly from the 2.6% employers said they plan to shell out this year, according to a survey of 773 U.S. companies by Towers Watson, a consulting firm. Those figures include all types of workers, from executives to clerical workers, exempt and nonexempt, salaried and those paid by the hour.

Companies “plan a small uptick in their funding for merit increases in 2012 versus 2011,” said Laura Sejen, global practice leader of rewards for Towers Watson.

“For employees, on average, that translates into salary increases that might not keep up with inflation,” she said.

The consumer price index for all urban consumers rose 3.6% in the 12 months ending July 2011. See the consumer price index data on the Bureau of Labor Statistics' website.

And while the gap between the increase in workers' salaries and CEO's (base pay) raises is shrinking, the one between them and Wall St. CEO's is expanding exponentially:
In fact, the gap between average pay hikes for executives compared with those for other workers is shrinking, Sejen said.

“The planned increases are pretty much the same no matter what segment of the population you’re looking at — be it nonexempt, hourly clerical and professional up to executive,” she said.

About 8 or 9 years ago, she said, “there used to be a gap in funding of the base-pay increase of executives versus the rest of the population. It could be a couple of points greater, maybe more. Now it’s basically the same.”

Why? “My own opinion is that’s a manifestation of some of the pressure on executive compensation broadly,” she said.

But also, she said, “for executives, the base pay is really the smallest piece of the pie. It’s all about variable pay in the form of annual and long-term incentives.”

Then there is one group whose pay and incentives increased wildly, out of all proportion to their companies' performance, and even as employee compensation suffered as a result. That group is the one inhabiting the rarefied world of the Masters of the Universe, Wall St CEO's.
Last year was an awful one for many on Wall Street. But not everyone struggled. Some even partied like it was 2006.

In fact, for the 50 people ranked in Bloomberg Markets' annual list of the best-paid chief executives in finance, 2011 was nothing to complain about. Those 50 people saw their pay rise by an average of 20.4 percent, even as Wall Street shed tens of thousands of workers, bank shares plunged and the greater economy foundered.

The two highest paid individuals on that list of top 50 are co-CEO's of private equity firm KKR & Co., Henry Roberts Kravis and his cousin George Roberts, each weighing in with about $30million in total annual compensation. 2011 may have been a bad year for banks but it was a fine year for their CEO's.
Kravis and Roberts, 68, lead a list of 50 financial CEOs whose compensation collectively rose by an average of 20.4 percent in 2011 -- a year when most big banks and brokerages saw their revenues, profits and stock prices plummet. The 2011 pay rise followed a 26 percent increase in 2010 for CEOs who held the same job in both years
Even though KKR's stock slid 5.4%, they took home a lot morethan their $30mil salary
That captures only a slice of their total compensation, however. Because of their stake in the listed company, each took home an additional $64.2 million in dividends and other distributions, according to company filings.
Another private equity manager that did pretty well was Stephen Swarchzman, head of the Blackstone Group
All told, Schwarzman received $148.5 million in pay and dividends in 2011.
Another person high on the list is Jamie Dimon, famous recently for incurring a $2B trading loss at JPMorgan Chase through a series of 'egregious mistakes'
The highest-paid banker in the Finance 50 is Jamie Dimon of JPMorgan Chase & Co. (JPM) (JPM) His total compensation increased 11 percent, to $23 million, even as the bank’s stock sank 20 percent.
Dimon is No. 9 on Bloomberg Markets magazine’s ranking of financial CEOs who provided the least shareholder value during the three years from 2009 through 2011.
Citigroup's Vikram Pandit leads the rankings of least shareholder value. Shareholders have rejected his pay award in a non-binding vote, thanks to a rule in the Dodd Frank law
Pandit’s pay made headlines when the majority of Citigroup shareholders, invoking the so-called say-on-pay provision of the Dodd-Frank financial-reform law, voted to reject it. The vote isn’t binding, but outgoing Citi Chairman Richard Parsons said the bank’s board would reconsider executive pay packages in light of it.
So, we see exactly who is 'doing fine' in this economy - Mitt Romney's compatriots in private equity. I'd say this makes his claims that President Obama is out of touch for claiming the private sector is doing fine, just a tad hypocritical, and his claim that this experience 'living in the economy' as a qualification to be President of the US, even more so.

Originally posted to Barefoothoofcare on Sun Jun 10, 2012 at 11:06 AM PDT.

Also republished by ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, Income Inequality Kos, and German American Friendship Group.

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Comment Preferences

  •  Tip Jar (15+ / 0-)

    "I'm sculpting now. Landscapes mostly." ~ Yogi Bear

    by eXtina on Sun Jun 10, 2012 at 11:06:05 AM PDT

  •  Yes, they are doing fine. (1+ / 0-)
    Recommended by:

    So?  Wall Street CEO's and hedge fund managers are not exactly "the private sector."  

    They are maybe .001% of the private sector.  

    •  Yes, they are exactly that, (5+ / 0-)
      Recommended by:
      eXtina, JeffW, socalmonk, ozsea1, Mr Robert

      or will you claim that the Lords of Finance Capital are the public sector ?
      We are all aware of the percentages.

      The GOP ... Government of the 1%, by the 1%, for the 1%

      by Azazello on Sun Jun 10, 2012 at 11:43:15 AM PDT

      [ Parent ]

      •  When I think of the private sector (1+ / 0-)
        Recommended by:

        I think of my friend who owns a plumbing business, or the corner restaurant, or my friend the mechanic, or a friend who sells cars at a car dealership, or a friend who's a local CPA, or a friend who installs house alarms, or a friend who is a Vet, or a friend who works at a local bank,  or a friend who does landscaping . . .

        they are the private sector and they are not "doing fine."  

        The "doing fine" in quotes by the diarist was obviously a reference to the President's comment, taken out of context, that the private sector was "doing fine."  I don't think those people I mentioned as the private sector would be happy to be lumped together with Wall St. CEO's and hedge fund managers.  

        •  Certainly, the private sector (1+ / 0-)
          Recommended by:

          doesn't let very much trickle down and the very top of the private sector doesn't seem to give a damn about the 99%. You're equivocating on the term private sector, which in policy debates refers to Capital, not low-wage workers, those who've had their jobs outsourced or struggling small business people. These citizens are the victims of the success of the investor class, as are laid-off public sector workers.

          The GOP ... Government of the 1%, by the 1%, for the 1%

          by Azazello on Sun Jun 10, 2012 at 12:20:20 PM PDT

          [ Parent ]

          •  Actually, I AM talking about the private sector (1+ / 0-)
            Recommended by:

            because all of those individuals I mentioned are owners, or part owners, of small business -- i.e., they have invested "capital."  And, by the way, they are generally corporations as well.

            People need to stop thinking "business," and "the private sector," means only Wall Street traders and mega-zillion dollar CEO's.  MOST of business in this country, MOST of the private sector in this country, is not that.  

            •  Nonsense, and obfuscation. (1+ / 0-)
              Recommended by:
              The Angry Architect

              Most of the business activity in this country, employment and sales, is controlled by large corporations, not small businesses or owner-operators. Are there more small, family-run retail outlets than there are WalMarts ? Maybe, but combined they don't have the sales or employees that WalMart does. And, by the way, it doesn't make a damned bit of difference if they are legally incorporated and therefore, technically, corporations.  Mom-and-pop hardware stores, if any still exist, are not in the same category as corporate big box stores.
              People need to stop defending monopoly capitalism with disingenuous misrepresentations.

              The GOP ... Government of the 1%, by the 1%, for the 1%

              by Azazello on Sun Jun 10, 2012 at 01:55:07 PM PDT

              [ Parent ]

              •  Wow, because I said that all business is - (2+ / 0-)
                Recommended by:
                VClib, The Angry Architect

                not the same as Wall Street CEO's and hedge fund managers, I'm "defending monopoly capitalism with disingenuous misrepresentations"????

                Let me give you a clue.  There's a WHOLE WOLRD of business between a "mom and pop" operation and Wal-Mart.  There's my friend who owns 3 local restaurants and employs maybe 150 people.  There's my friend who is a partner in a CPA firm that employs maybe 200 people.  I'm a partner in a law firm that employs a lot of people.   There are even very prominent businesses that are not Wal-Mart that employ hundreds.  Here in Louisiana, for example, I know the following business owners, to name a few: the  Brennan Family that employ hundreds;  the owner of a few local hotels and a tourism company, that employes hundreds; the Mclhenny Company, Justiss Oil Company, the Lamarque family, Gulf Coast Bank, Boh Brothers, Gootee Constrution,  Al Copeland investments, Liberty Bank,  Wink Engineering, Rouses Supermarkets, Whitney Bank, Brammer Engineering, Crutcher-Tufts,   I could go on and on.  

                If thinking that these companies are not the same as Wall Street CEO's and hedge fund managers, and if saying these kinds of companies are not evil simply because they employ a lot of people and make money doing it, is not "progressive," I guess that's why I'm not a progressive.  To me, this is business, every bit as much as Wall Street and Wal Mart  -- and business is not, in and of itself, an evil word.  

                •  Oh please, "evil" is a childish concept. (1+ / 0-)
                  Recommended by:

                  This is not about good and evil, it's about raw economic power. I'm all for small business, more power to 'em. But aggregate demand is finite and every dollar of sales going to a publicly traded corporation is one that won't be going to a family business. All your pals in the local CofC ? They're not multi-nationals and policies favoring Big Biz are not necessarily going to favor them. God knows how many principals of small and medium-sized businesses have been voting against their own interests because of the Big Fish in a Small Pond syndrome. The guy with 3 local restaurants needs consumers, not tax-cuts or free-trade deals. And, by the way, corporate profits are up.

                               So yeah, the private-sector is doing fine.

                  The GOP ... Government of the 1%, by the 1%, for the 1%

                  by Azazello on Sun Jun 10, 2012 at 03:27:39 PM PDT

                  [ Parent ]

                  •  So, are you saying (1+ / 0-)
                    Recommended by:
                    God knows how many principals of small and medium-sized businesses have been voting against their own interests because of the Big Fish in a Small Pond syndrome
                    that the owners of these businesses have "been voting against their own interests"?  How do you know that?  And are you saying that YOU know better than the owners of all those businesses what is in the best interest of THEIR business?  What's your background in business consulting?  

                    Since all of these businesses have been, over the long term, pretty successful, I kind of think that the people running those businesses know what's in the best interests of their businesses.  

                    And frankly, I kind of think that if any of those owners read comments like this from a candidate -- that he/she knows better than THEY do what is good for THEIR businesses -- well (unless that candidate had some extensive successful background in business), that would be reason enough for them to vote against that candidate.

                    I always find it kind of arrogant when somebody says, "party X is voting against their own bests interests."  That assumes that the speaker knows better than party X what is in Party X's best interests.  

                    •  Look, I've been reading your comments for years. (1+ / 0-)
                      Recommended by:

                      Every time somebody suggests reining in corporate power you're there to tell them why we can't, or shouldn't, do so. The American Dream used to be a business of one's own, then it got downsized to a house and now the American dream is three meals a day. This is what corporate power has done and the benefits have accrued to a very small class of people. Small businesses, like family farms, are nearly extinct. Tell 'em that when you go to Davos next time.

                      The GOP ... Government of the 1%, by the 1%, for the 1%

                      by Azazello on Sun Jun 10, 2012 at 03:53:18 PM PDT

                      [ Parent ]

    •  They are apparently the private sector Mr. (1+ / 0-)
      Recommended by:

      Obama has been using as his benchmark. Everybody else is, ultimately, labor...employees. Or unemployees.

      I quit school very young, and never learned how to believe things just because I was told to.

      by socalmonk on Sun Jun 10, 2012 at 11:58:46 AM PDT

      [ Parent ]

      •  If this is really what the President did (1+ / 0-)
        Recommended by:

        -- use Wall St CEO's and hedge fund managers as a "benchmark" for "the private sector" -- he really WOULD BE  out of touch.

        I actually read it as the diarist using Wall St. CEO's and hedge fund managers as a "benchmark" for the private sector, which is why I responded negatively.  If the diarist is saying that the PRESIDENT was doing that, then I shift my criticism to the President.  

        •  There's a larger point to be made (1+ / 0-)
          Recommended by:

          than debating what the President meant by that comment. I happen to think it's a true gaffe - sounds bad as a soundbite and isn't really true either. His clarification that 'the economy' isn't fine didn't really help.

          But the larger point is about Romney - it's obvious that private equity does spectacularly well even as everyone else is suffering, this is not capitalism, and this experience will not help someone in the White HOuse

          "I'm sculpting now. Landscapes mostly." ~ Yogi Bear

          by eXtina on Sun Jun 10, 2012 at 12:11:02 PM PDT

          [ Parent ]

          •  True. and go ahead and tax the (1+ / 0-)
            Recommended by:

            .001%.  That extra $4 billion a year will do pretty much nothing to help the economy.  It's a symbolic statement, but practically speaking, it's nothing more than a rounding error in the annual amount the federal government spends.  

            The fact that a very very very small number of people are doing exceedingly well, and that the President and Congress need to do something to help the economy for the rest of us in the private sector, are two completely separate things.  

            •  Someone who has 'lived this economy' is not (0+ / 0-)

              qualified to be President of the 99% and has no right to exclaim that the President is 'out of touch'.

              "I'm sculpting now. Landscapes mostly." ~ Yogi Bear

              by eXtina on Sun Jun 10, 2012 at 12:35:37 PM PDT

              [ Parent ]

            •  It may be symbolic, but it sure as hell would (1+ / 0-)
              Recommended by:

              help the spirits of the common working person.  4 Billion isn't anything to sneeze at either.  Of course it won't fix the budget, but at least it's a start.  One has to start somewhere.  Imagine if NASA wouldn't go to the moon unless they had everything set up perfectly??  Or a person not opening up a donut shop because they don't have 110% of the cash needed prior to starting??  It's better than nothing, as many are wont to say.  Even Medicare didn't start out as what it's become today.

    •  that is exactly who the pres. (1+ / 0-)
      Recommended by:

      was talking about those that have that 2 trillion $dollars just holding it

      •  MIKGREN - Private equity funds have no cash (1+ / 0-)
        Recommended by:

        The way the partnerships are set up the investors provide cash to the funds only when they need it for a new investment, so the private equity funds themselves don't hold cash (beyond a small operating account). The $2 Trillion in cash is in non-bank institutions and much of it is offshore and won't return to the US unless there is a tax holiday.

        "let's talk about that"

        by VClib on Mon Jun 11, 2012 at 10:46:39 AM PDT

        [ Parent ]

        •  Many cash rich US companies see spending that cash (1+ / 0-)
          Recommended by:

          outside the US has a 35% discount, as they need to pay US taxes if they bring that cash to the US.  So they are better off expanding their business operations outside the US than in the US.

          Just another example of how our tax code discourages hiring employees in the US, or puts downward pressure on US wages.

          Unfortunately too many Democratic officials see they cannot reform this mistake in the tax code because it will be seen as helping big business.

          The most important way to protect the environment is not to have more than one child.

          by nextstep on Mon Jun 11, 2012 at 11:17:14 AM PDT

          [ Parent ]

          •  Yes, that's true (0+ / 0-)

            For cash held outside the US a domestic project would have to have a net present value of nearly 50% higher than a project overseas. As any good financial analyst knows that hurdle is almost insurmountable.

            "let's talk about that"

            by VClib on Mon Jun 11, 2012 at 01:13:05 PM PDT

            [ Parent ]

  •  All hail the masters of the universe... (1+ / 0-)
    Recommended by:

    able to buy the best damn govt on the planet.

    Progressive Candidate Obama (now - Nov 6, 2012)
    Bipartisan Obama returns (Nov 7, 2012)

    by The Dead Man on Sun Jun 10, 2012 at 01:26:22 PM PDT

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