Economic crisis, but not for fat cats

The rich get richer, cartoon

By Matthew MacEgan in the USA:

Double-digit rise in American CEO pay

2 July 2013

The 200 highest paid CEOs at US public companies with revenue above $1 billion received a median compensation package of $15.1 million in 2012, 16 percent higher than the previous year, according to a report published Sunday by the New York Times. The Times compiled its report based on data provided by the executive compensation analysis firm Equilar Inc.

The Times also published an adjoining article on the ongoing practice of granting retiring and even fired CEOs multi-million-dollar “golden parachute” retirement packages. The articles provide insight into the further enrichment of the corporate elite, under conditions of declining wages and mounting poverty for millions of workers and youth in the US.

Most of the money in the CEO compensation packages came from stock and option grants, which generally rose sharply in line with the rise on US and world stock exchanges. …

Overall, the stock prices of the 200 firms included in the Times survey rose 19 percent in 2012, just 3 percent higher than the median rise in CEO compensation. In some cases, however, CEO pay shot up even though the company’s stock fell.

At the top of the list is Lawrence Ellison, CEO of the software company Oracle, with compensation totaling $96.2 million, including $90.7 million in stock options. His pay package increased by 24 percent over 2011. Oracle’s total share value, however, decreased by 22 percent.

The second highest paid executive on the list was Robert Kotick of the software publishing firm Activision Blizzard (ATVI). He took in $64.9 million, a staggering 680 percent increase over his 2011 salary. Included in that figure were stocks estimated at $55.9 million. ATVI stock, however, was down 12 percent in 2012.

The fifth highest paid executive, James Crowe, of Level 3 Communications (LVLT), received $40.7 million in 2012, an increase of 261 percent, with over $37 million coming in the form of stock options. …

On top of the obscenely large salaries and stock options awarded to current officers, many executives are given multi-million-dollar severance packages when they choose to retire. In many cases, retiring chief executives continue to receive millions of dollars even years after their retirement. This also applies to many CEOs who have been fired.

The biggest package in 2012 went to James Mulva, who stepped down as CEO of ConocoPhillips after 10 years, taking $156 million as an exit package, most of which came from the market value of the stock gains he received. Edward Breen, formerly of Tyco International, received an exit package of $46 million in 2012, followed by $55.8 million in deferred shares in 2013. As chairman, he will receive $30 million more as a pension payment in 2016.

12 thoughts on “Economic crisis, but not for fat cats

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