CEOs earn 262 times pay of average worker (Reuters)

(Good to know that the average CEO earns more in one day than I've ever earned in a year)

CEOs earn 262 times pay of average worker

Wed Jun 21, 2006 11:08 PM ET

NEW YORK (Reuters) - Chief executive officers in the United States earned 262 times the pay of an average worker in 2005, the second-highest level in the 40 years for which there is data, a nonprofit think-tank said on Wednesday.

In fact, a CEO earned more in one workday than an average worker earned in 52 weeks, said the Economic Policy Institute in Washington, D.C. The typical worker's compensation averaged just under $42,000 for the year, while the average CEO brought home almost $11 million, EPI said.

In recent years, compensation has been a hot issue with shareholders who have been bombarded with news stories about chief executives who are given multimillion dollar bonus and pay packages even if shares have declined.

For example, the chief executives of 11 of the largest companies were awarded a total of $865 million in pay in the last two years, even as they presided over a total loss of $640 billion in shareholder value, a recent study from governance firm the Corporate Library, found.

(more at link)

<http://go.reuters.com/newsArticle.jhtml?type=domesticNews&storyID=12607863&src=rss/domesticNews>

is very wrong here.

:sarcasm:

ten is way too much, IMHO.

time has come.

If you have one person willing to part from his money and another person willing to receive it, how do you prevent it from happening, short of a police state?

A fair minimum wage is all that's needed. And unions.

Guess you forgot the :sarcasm: sign

"...That ratio surged in the 1990s and hit 300 at the end of the recovery in 2000, according to EPI...."

But this 262 comes "...as they presided over a total loss of $640 billion in shareholder value...,"

So this is extremely screwed up.

But I must confess, I really do hate CEOs.

Too bad the story doesn't identify the criteria for the companies used to measure this statistic. It surely can't be all companies. It would be nice to know the number for say, the Fortune 100, 500, 1000, and 5000.

The most outrageous thing is that we subsidize these preposterous comp levels by affording the companies a tax deduction. I've been writing Democratic congress people for years trying to get somebody to take up the cause of putting limits on deductability based on the ratio at an individual company.

In Japan, this number is (or used to be not long ago) 7.

...here's a link to CNN Money: <http://money.cnn.com/2006/06/21/news/companies/ceo_pay_epi/>

For some odd reason, I'm having trouble connecting with the EPI website, here's a link:

<http://www.epinet.org/>

This one works, but it's sort of a "back door." <http://library.epinet.org/>

While you've been sending good advice to the party, its star has been thinking of ways to "incentivize" corporations; i.e., sustain present tax breaks and find new ones.

See, e.g., this April interview:
http://blogs.suntimes.com/sweet/2006/04/hillary_rodham_clinton_tells_b.html

Welcome to DU!! :toast:

Think about the connection. Then demand that this pro-corporate party start putting us ahead of its sugar daddies.

Repugs are pro-corporate and Dems are pro-corporate with lip service to the working people. At least one party is somewhat honest.

No raise if you're turning the tools - off to China, India and soon - Africa - for your precious job. But, hey, there's always Mickey D's - "ya gotta eat." Be thankful the Lord gave you a job!

Not on the factory floor? Mr. Middle Level Manager you too should be scared that your job will whither away too. Plenty of scabs want your pay even if you think it's inadequate. Think about that next time you lay someone off.

Why not?

There have to be some Chinese or Indian business geniuses who can run the company better for a fraction of this cost.

that just stayed out of the way and let the employees do their thing. My husband's company has somebody new sweep in every 2-3 years with a different organizational plan. They set changes in motion, pad their resume with all the remarkable successes they enacted, and move on to the next victim. Employees never have the time to fully implement all the changes before the next wunderkind sets up shop.

http://www.ms.foundation.org/wmspage.cfm?parm1=329

Holly Sklar is co-author of "Raise the Floor: Wages and Policies That Work for All Of Us."

Op Ed
By Holly Sklar -- Raise the Floor
Distributed by Knight Ridder/Tribune Information Services,
November 22, 2005

EXCERPT

....Take two pies -- one for 1979, the other for 2003 (using the latest IRS data).

Divide the 1979 pie into 10 equal slices. If the slices were eaten according to the distribution of income in 1979:

* The richest 1 percent of taxpayers would get one slice.
* The rest of the top 20 percent would get four slices.
* The other 80 percent of taxpayers would split five slices.

Now, divide the 2003 pie into 10 slices.

* The richest 1 percent would get nearly two slices.
* The rest of the top 20 percent would get a little over four slices.
* The other 80 percent would split four slices.

In 1979, the top 20 percent of taxpayers had about as much income as the other 80 percent combined. In 2003, the top 20 percent had 60 percent of the income, leaving just 40 percent for the rest. The richest 1 percent nearly doubled their share.

Let's look more closely at the upward shift in income.

In 1979, the bottom 40 percent of taxpayers had about 15 percent more combined income than the richest 1 percent. In 2003, the richest 1 percent had twice the income share of the bottom 40 percent.

The richest 1 percent share of reported income jumped from 9.6 percent in 1979 to 17.5 percent in 2003. The bottom 40 percent share fell from 11.3 percent to 8.8 percent. ...

MORE

It's not just a matter of how the pie is split. It's also a matter of whether the pie is passed around or locked in the pantry. Money in large amounts is a very strange entity. When people at the bottom have more money, they go out and put it into circulation by spending it. This multiplies the effect of the money.

IF you give rich folk more money, they have more money, if you give poor or working class folk, (pretty much the same thing these days), they spend every cent of it! So in effect using tax dollars for welfare actually stimulates the economy more than joe millionaire sitting on his fortune IMO.

I believe the economy is healthiest when the greatest number of people are moving cash. I admit I know little about economic issues but can tell you trickle down has never worked except for the wealthy.

When the rich have more money they have more money.

When the less than rich have more money,.....THEY SPEND IT!

You got something against trying to make the comple subject of economics understandable?

It's one analogy to provide one snapshot of one aspect of this issue. The person who wrote that has made a career of analyzing and advocating for better wages, and knows all of the implications and repercussions. She wrote a column to depict distriubution of wealth in the clearest terms possible.

But if we always write a PHD thesis to explain what's going on, we're never going to get any kind of message out.

of very little use except it be spread.
Francis Bacon (1561-1626)

I had thought the quote was from the Gilded Age, but it is much older...those Elizabethans were a clever bunch.

Our country has been bought and paid for by big business and the results are not promising.

Sorry, no source at hand.

In the mean time a much bigger issue is hardly ever discussed: the ratio of capital is much higher than the ratio of income, given that average workers have practically no capital.

that the CEO's of America need to be converted to methane, ethanol, and biodiesel.

They may not be high yield, but it would help 2 different crises at once.

<http://www.epinet.org/content.cfm/webfeatures_snapshots_20060621>

A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.
(Sign up for our Economic Snapshots mailing list to receive an alert whenever a new Snapshot is posted.)
(See Snapshots Archive.)

Snapshot for June 21, 2006.

CEO-worker pay imbalance grows
In 2005, the average CEO in the United States earned 262 times the pay of the average worker, the second-highest level of this ratio in the 40 years for which there are data. In 2005, a CEO earned more in one workday (there are 260 in a year) than an average worker earned in 52 weeks.

The 1980s, 1990s, and 2000s have been prosperous times for top U.S. executives, especially relative to other wage earners. This can be seen by examining the increased divergence between CEO pay and an average worker’s pay over time, as shown in Figure A. In 1965, U.S. CEOs in major companies earned 24 times more than an average worker; this ratio grew to 35 in 1978 and to 71 in 1989. The ratio surged in the 1990s and hit 300 at the end of the recovery in 2000. The fall in the stock market reduced CEO stock-related pay (e.g., options) causing CEO pay to moderate to 143 times that of an average worker in 2002. Since then, however, CEO pay has exploded and by 2005 the average CEO was paid $10,982,000 a year, or 262 times that of an average worker ($41,861).



*Data note:
CEO pay is realized direct compensation defined as the sum of salary, bonus, value of restricted stock at grant, and other long-term incentive award payments from a Mercer Survey conducted for the Wall Street Journal and prior Wall Street Journal-sponsored surveys. Worker pay is the hourly wage of production and nonsupervisory workers, assuming the economy-wide ratio of compensation to wages and a full-time, year-round job.

This week's Snapshot was written by EPI president Lawrence Mishel.

Check out the archive for past Economic Snapshots.



Copyright © 2006 by The Economic Policy Institute. All rights reserved.

Readers may redistribute this material to other individuals for noncommercial use, provided that the text, data, and all HTML code remain intact and unaltered in any way. This article may not be resold, reprinted, or redistributed for compensation of any kind without prior written permission. If you have any questions about permissions, please contact EPI at webmaster@epinet.org.

<http://www.epinet.org/content.cfm/webfeatures_snapshots_20060621>

2/24/06 - from Bill Moyers: Saving Democracy

In 1960 the gap between the top 20% and the bottom 20% was thirtyfold. Now it is seventy-five fold. Thirty years ago the average annual compensation of the top 100 chief executives in the country was 30 times the pay of the average worker. Today it is 1000 times the pay of the average worker.

http://www.commondreams.org/views06/0224-20.htm

I mean, no one could run those companies making a measley $500,00 or 1 mil could they now?

:mad:

:kick:

Pretty much nothing for the last decade besides Kennedy's lone voice.

But this perhaps one of the most pressing issues facing the working people.

Shame on Democrats.

Fuck them. They better hope there's never a revolution in this country or their heads will be first on the chopping block.