The Institute for Policy Studies (IPS) released its annual report on executive compensation today — "CEO Pay and the Great Recession." "I'm afraid that this year's report will raise just about everybody's blood pressure," lead author Sarah Anderson said. Indeed, the report found that "CEOs of the 50 firms that have laid off the most workers since the onset of the economic crisis took home nearly $12 million on average in 2009." Those CEOs' combined compensation totaled $598 million, while at the same time, their companies eliminated 531,363 jobs despite reporting a 44 percent average profit increase for 2009.
More staggering is the level of executive pay, according to IPS:
[A]fter adjusting for inflation, CEO pay in 2009 more than doubled the CEO pay average for the decade of the 1990s, more than quadrupled the CEO pay average for the 1980s, and ran approximately eight times the CEO average for all the decades of the mid-20th century.
American workers, by contrast, are taking home less in real weekly wages than they took home in the 1970s.
The Kansas City Star took a closer look at some of the CEOs and companies in IPS's report:
Fred Hassan, former CEO of Schering-Plough, presided over announced layoffs affecting 16,000 workers after a 2009 merger with Merck. He resigned after the merger, receiving "golden parachute" compensation in 2009 of more than $49.6 million to rank as the highest-paid layoff leader.
The top five companies announcing the most layoffs for the study period were General Motors (75,733); Citigroup (52,175); Bank of America (35,000); Caterpillar (27,499) and Verizon (21,308). Among those top five, the biggest compensation package — nearly $17.5 million — went to Ivan Seidenberg, CEO of Verizon.
According to IPS, American CEOs make 263 times the average compensation for American workers, up from the 30 to 1 ratio in the 1970s. For comparison, the average compensation of a Japanese CEO is less than one-sixth that of their American counterpart and 16 times more than the average Japanese worker.
But on top of the lavish CEO pay at the expense of the American worker, many of these top-layoff firms received money from the taxpayer bailouts in 2008. Of these, IPS notes, "American Express CEO Kenneth Chenault took home the highest 2009 pay, $16.8 million, a sum that included a $5 million cash bonus. American Express has laid off 4,000 employees since receiving $3.39 billion in TARP funding."
"These numbers all reflect a broader trend in Great Recession-era Corporate America," the IPS report says, "the relentless squeezing of worker jobs, pay and benefits to boost corporate earnings and maintain corporate executive paychecks at their recent bloated levels."
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