Average CEO Pay Jumps To $14 Million, While Workers Barely Tread Water
In an era when so many American workers have seen their wages stagnate or even fall, paychecks for top executives have climbed astronomically higher. And higher.
A new report shows that despite public outrage, the trend continues. Salaries for the 200 top-paid CEOs rose 5 percent last year to a median $14.5 million, according to a study by compensation-data company Equilar for The New York Times. The increase suggests that new Dodd-Frank regulations requiring shareholders to have a say in how much executives are paid are having little effect in reining in exorbitant executive-compensation packages.
Though the 5 percent climb in 2011 was less than it was in the previous year, it still outpaces that of ordinary working Americans. According to a survey by Mercer, average workers saw their pay rise by an average 2.9 percent.
For this year, the human-resource consulting firm reports that employers plan to boost average workers' base pay by 3 percent -- just enough to counter increased costs for food, energy and other household expenses, which are running at about 2.7 percent. In other words, most working Americans are merely treading water -- and nearly 13 million remain unemployed.
In 2011, U.S. workers earned an average annual salary of $34,053, according to the AFL-CIO Executive PayWatch report, though data released last October suggest even that number may be too high. Data compiled by the Social Security Administration showed the median paycheck in 2010 -- the most recent year in which the data are available -- fell 1.2 percent to $26,364.
The AFL-CIO report says that the ratio of CEO-to-worker pay -- between chief executives at companies within the S&P 500 Index and U.S. workers -- widened to 380 times in 2011 from 343 times in 2010. In 1980, the union notes, the average large company CEO received 42 times the average worker's pay.
Equilar's report notes that for the first time ever, two CEOs earned stratospheric, nine-figure incomes last year. They were:
- Apple Inc.'s Timothy Cook (pictured above), who succeeded Steve Jobs, received pay last year valued at $378 million; and
- David E. Simon, the much lesser known CEO of mall-operator Simon Property Group, who took home $137 million.
Others listed near the top in the report and noted by the Times included familiar and not-so-familiar names, such as:
- Larry Ellison of Oracle Corp., who earned $77.6 million last year.
- Leslie Moonves of CBS Corp. ($68.4 million).
- Discovery Communications Inc. CEO David M. Zaslav ($52.4 million), who had the sixth-largest pay package in corporate America last year, even though, as the Times notes, Discovery had about a tenth the revenue of Oracle last year.
Clearly, CEOs have it pretty good, but those working on Wall Street have it even better -- at least percentage-wise. There, chief executives saw their pay increase an average 20 percent, Bloomberg Markets reports in its July issue (via VCCircle).
Topping the list is private-equity baron Henry Roberts Kravis who was awarded $30 million in salary and other compensation by the board of his company, KKR & Co. Kravis co-founded the firm in 1976 along with his cousin, Jerome Kohlberg, who earned $29.9 million last year and placed second in the magazine's list.
The publication named Citigroup Inc. CEO Vikram Pandit as "as the executive who provided the least shareholder value," noting that his $15 million pay package last year was being reconsidered after shareholders rejected it in April during the company's annual meeting.
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David Schepp has spent more than a dozen years covering business news for the electronic and print media, including Dow Jones Newswires, BBC News, Gannett Co., and most recently at AOL's DailyFinance. Nearly 10 years ago, he started writing a weekly People@Work column, looking in depth at issues facing workers in today's workplace. The syndicated column appeared in newspapers and websites nationwide before it made its debut on DailyFinance in 2010. Schepp now continues that tradition at Aol Jobs, covering the jobs beat and providing readers insight and analysis into the nation's challenging employment scene.
Schepp holds a Bachelor of Arts degree in journalism from Metropolitan State College of Denver.
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