Labor Day Report Exposes Excessive Executive Pay
The report contains provocative findings from a study of 23 large companies under investigation by the Justice Department, the Securities and Exchange Commission and other agencies. Examples:
- Collectively, the CEOs of these companies pocketed $1.4 billion from 1999 to 2001, while shareholders and employees suffered massive losses. The value of shares in these companies lost $530 billion between January 1, 2000 and July 21, 2002. Employees sustained a total of 162,000 layoffs since January 2001.
- Worker pay hasn't grown at anything near the same rate at CEO pay. The Commerce Department reported that wages and salaries decreased from December 2000 to August 2002. If the average pay for production workers had grown at the same rate since 1990 as CEO pay, the workers' 2001 annual earnings would have been $101,156 instead of $25,467. If the minimum wage had grown at the same rate as CEO pay, it would have been $21.41 an hour in 2001 instead of $5.15 an hour.
To curb these imbalances, the policy groups suggest a list of reforms that include requiring stock options to be expensed, placing limits on tax deductions for excessive compensation, banning companies from offering executive perks not available to other employees, improving plain English disclosure standards for executive compensation, requiring shareholder approval of executive severance packages, increasing barriers to selling based on insider information, and enacting broader standards of board independence.
Download  a copy of "Executive Excess 2002," which is subtitled, "CEOs Cook the Books, Skewer the Rest of Us."