Payment for chief executive officers at United States corporations increased 12 percentage points in 2010 to reach a median figure of $9.6 million. Not since before six decades have gone by did corporate profits accelerate at such a rate as they did in the last 90 days of the previous year. CEOs have been seeing outsize pay increases while at the same time the rank and file has worked increasingly harder for the same amount of money. Source for this article – CEO pay soars as flat middle class wages erode with inflation by MoneyBlogNewz.
CEO pay increases
coming from the hard workers
At a time when millions of Americans simply hope they keep their jobs, average CEO pay has risen to surpass pre-recession amounts. Even as employment is increasing, employee pay is not, but CEO pay is. The pocket book of CEO’s is growing daily as stock prices rise, rather than hiring more of the 13 million people out of work. CEO’s have no reason to hire employees when they’re making do with who they have. CEOs from almost every economic sector bailed out by taxpayers’ averaged 12 percent raises in 2010. Yet, private sector pay rose by about 2 percent. In March, unemployment was around 8.8 percent. Most economists predict the jobless rate will continue to remain high for years.
Stock options for CEOs increasing
Phillipe Dauman of Viacom took home $84.5 million in only nine months last year, making him the highest paid CEO. The increasing price of oil and gas has been good to Ray Irani of Occidental Petroleum, who was the runner up with $76.1 million, a 142 percent pay increase over 2009. Larry Ellison of Oracle, the third-richest American with a net worth of $39.5 million according to Forbes, took home $70.1 million. CEOs are gaining the largest raises since 2007, with stock choice thanks to Wall Street. Several CEOs played the stock market well by taking stock possibilities when they had no value, knowing the market would one day recover. Thanks to taxpayer bailouts and interest-free leverage offered by the Federal Reserve, the stock market has recovered spectacularly and the CEOs are cashing in. USA Today states that several of the CEOs cashing in their stock possibilities were making well over $20 million.
Middle-class hit hard by commodity price increases
The huge CEO pay increases are hard to swallow for the American middle-class, who has watched wages stagnate for a generation. The Bureau of Labor Statistics states the average hourly wage for workers hasn’t increased by a penny in so-much-as five months. While U.S. workers who still have jobs aren’t getting raises, employers in developing nations are hiring new customers who are pushing up demand and costs for food, oil, cotton and other commodities. Prices of commodities and wages are basically going in opposite directions. Gas is the biggest thing hurting the American worker. An average of 12 gallons of gas a week is used by the average employee. Individuals have reported that filling a gas tank is costing $40 more per month than it did last year. Meanwhile, the average weekly wage is up just $18 from past year.
Articles cited
New York Times
nytimes.com/2011/04/10/business/10comp.html?_r=2#38;ref=business
USA Today
usatoday.com/money/companies/management/2011-04-04-1Aoptions04_ST_N.htm
NPR
npr.org/2011/04/10/135272006/paychecks-cant-keep-up-with-rising-prices
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