CEO pay Up 22% in 2005 .... Everyone else 0%

[RedEarth]

In 2005, Executives' Pay +21.9%, everybody else 0%

by Bonddad, Mon Apr 10, 2006 at 09:12:59 AM EST

Compensated only by stock options since 1997, Fairbank claimed one of the biggest windfalls among CEOs, exercising 3.6 million options for gains of nearly $250 million. His personal haul exceeded the annual profits of more than 550 Fortune 1000 companies, including Goodyear Tire & Rubber, Reebok and Pier 1

Fairbank, 55, pulled in $56 million from options in 2004. Capital One says Fairbank had to exercise options last year because they were set to expire. The company also noted its 24.6% annual shareholder returns the past decade.

Median 2005 pay among chief executives running most of the nation's 100 largest companies soared 25% to $17.9 million, dwarfing the 3.1% average gain by typical American workers, USA TODAY found in its annual analysis of CEO pay.


Memo to the USA Today: Please adjust your figures for inflation.
Now...onto the show. According to the Bureau of Labor Statistics, non-supervisory wages (which represent about 80% of the population) increased from $15.88 in January 2005 to $16.35 in December of 2005 for an increase of 2.95%. Over the same period, the inflation figure increase from 190.7 to 196.8 for an increase of 3.1%. So using the BLS numbers gives non-supervisory employees a net decrease of .15 in wages and using the UA Today figure gives the average American an increase o 0. Wow, that's really impressive.


It's not as though corporations don't have the money to spare:



U.S. corporate profits have increased 21.3% in the past year and now account for the largest share of national income in 40 years, the Commerce Department said Thursday.

http://www.mydd.com/story/2006/4/10/91259/1961

[BlooInBloo]

1. ROFL! Think of the impact on idiot-level statistics!

Because ceos/executives make so much, compared to average joes, such pay increases could well allow republicans to claim that AVERAGE PAY IS ON THE RISE - thus "validating" republican policies. Meanwhile the rich get richer and the poor are ACTUALLY getting poorer...

[TahitiNut]

3. Oh, yes. The 'mythical average' is a well-known statistical deceit.

Folks who don't know the difference between the 'mean' and the 'median' are hooked by it every time.

[BlooInBloo]

6. Some BOE calculations...

Hypothesize the following:

100,000,000 people (avg joes) making $40k per year.

10,000 people (ceos) making $10,000,000 per year

Then a 20% increase in ceo pay results in the overall average pay increase by half-a-percent. May not sound like much on its own, but the sorts of numbers people talk about wrt to pay level are numbers like 1%, 3% and the like. Half a percent is could be a substantial part of such talk.

I pulled the hypothesis numbers completely outta my ass - they sounded semi-realistic, and they were easy to calculate with. :)

[TahitiNut]

8. I'd say the numbers are semi-realistic. The Gini Ratio tells the story.

When the Gini Ratio increases it means that the rich are getting richer and the poor poorer. That's the story of US family income for the past 30 years - as we've become a banana republic.

[Bassic]

2. Yes, every one knows that ceo's deserve more money than

the rest of us. After all, they work so much harder :sarcasm:

[TahitiNut]

4. After all, it's the whip that makes the slave-galley go faster, right?

:eyes:

[spag68]

5. Profits

Brings to mind that EXXON and the oil industry claim that it's a refining problem. I say take a billion out of your 40 billion profit and build a refinery. I also also think their execs. got their raises.

[ladjf]

7. That's OK. They needed it. A family can hardly survive on

$200,000,000 per year now days.