So, when I read this shit, I admit to laughing: there is a certain about of humor I find, mixed with the disgust, in the absolute ability of the captains of industry to continue to act like pigs at the trough in the face of all the misery of unemployment, low wages, no pensions and fear still coursing throughout every community. The system of greed, fired up by the great, almighty, "free market", just soldiers on in another fourth dimension. They just do not care
The facts:
Well, what a difference a few months and a larger pool of C.E.O.’s make. According to an updated analysis, the top 200 chief executives at public companies with at least $1 billion in revenue actually got a big raise last year, over all. The research, conducted for Sunday Business by Equilar Inc., the executive compensation analysis firm, found that the median 2012 pay package came in at $15.1 million — a leap of 16 percent from 2011. [emphasis added]
And:
As usual, cash pay for many of the managers pales next to the value of the stock and option grants they received. Median cash compensation was $5.3 million last year, while stock and option grants came in at $9 million.
Stock grants are clearly where the action is, and their value can really add up. Equilar’s analysis calculates the median value of stock holdings of these top C.E.O.’s at $51 million.
How's your big stock option package looking? Don't have one? Sucker...
While I am glad this is pointed out...
Obviously, the pace of change in corporate pay practices has been glacial, even as the growth in pay has exploded. Dysfunctional performance metrics are a root cause, experts say.
“How much of the pay is driven by right time, right place, and how much is driven by truly sustained, multiyear performance that’s still in place ‘X’ years out?” Mr. Foley said. “What I would like to see is not just performance criteria that are robust and meaningful but also awards that are at risk for a meaningful period of time.”
...it entirely misses the more important point.
CEO pay is entirely a scam at two levels. First, pay decisions are made by cronies on boards of directors, not performance. This has been true for 3-4 decades. It's all about an insider game of a small little circle of people rewarding each other, entirely irrespective of what happens with the company's performance.
When I wrote my book “The Audacity of Greed” back in 2009, I had the good fortune to talk with Graef “Bud” Crystal who was once one of the country’s premier compensation consultants—the guy who would be hired by CEOs to come up with compensation packages. He told me back then:
“In 1970, one CEO hired me and said, ‘we don’t have a bonus plan and do we need one?’” recalls Crystal. “I did the study and I went back to the CEO and said ‘yes you do need a bonus plan. But we have a problem area. You are making $150,000-a year and the problem is that the $150,000 is equal to the salary and the bonus to what your competitors are paying so we have to cut your pay to $100,000-a-year and then we can put in a bonus.’” Crystal laughs. “It was like a scene from The Exorcist where ice formed on the windows…he started arguing about the findings and he finally said ‘let me say this to you this way: who do you think is paying your bills anyway?’ I replied, ‘If I recall correctly the checks were drawn on the corporate account, not your personal account so the shareholders are paying me, not you.’ The meeting ended quite quickly.
Second, and perhaps the most obvious point to normal people, is that these guys are not the reason a company succeeds. So, when performance is evaluated, in the great almighty "free market", it seems to leave out the thousands and thousands of workers who actually are the main reason a company succeeds.
Oh, and while we're at it, ask yourself this question: when you leave a company because it goes belly up, what do you get? The yacht? The huge pension? The multi-million dollar golden parachute? Yeah, right: you are lucky if you get to grab your lunchbox before security tosses you out the door.
Not so the CEO, as this companion article points out:
Executives who choose to retire — or are forced to retire — often receive millions when they leave. And despite years of public outcry against such deals, multimillion-dollar severance packages are still common.
In 2012, the biggest package went to James J. Mulva, who stepped down as C.E.O. of ConocoPhillips after 10 years, according to an analysis by Equilar of the 10 largest exit packages. His total: about $156 million. As with all C.E.O.’s on the list, his exit sum is on top of salary, bonus and other compensation received while working for the company.
The final point worth making, and on the subject of laughter. The breathless articles pondering the surging discontent around the world -- the protests, the anger, the disgust -- rarely make the connection to this obvious point:
The system is gasping and wheezing in the lives of hundreds of millions of people because the despicable people at the helm still are hell-bent on wringing out every dollar for their own personal benefit.