One week ago the Sunday New York Times published an interesting report headlined The Drought Is over (At least for C.E.O.’s), written by Daniel Costello.
Think the C.E.O.’s made too much in 2009? It’s worse in 2010. One of the biggest scams America has ever seen continues to grow. Corporations can set whatever fee they want for their chief executives, regardless of what stockholders vote.
So this year, with American unemployment at 8.8%, or 13.5 million at risk for hunger and shelter, and corporations not anxious to hire, 200 top American corporations paid their bosses an average of 9.644 million dollars, 12% higher than last year.
That’s $1,928,800 dollars they divied up.
The highest paid was Phillippe P. Dauman, of Viacom, who received $84.5 million in 2010. The lowest was John Mackey of Whole Foods Market, who received $45, 968 (but has over $41 million in stock).
Let’s look at Vermont, my home state. We have a deficit of $358 million, a debt of $4.14 billion (7th worse in the country), and 5.4 % unemployment (these figures are misleading as many Vermonters have exhausted their unemployment benefits and exist by trade or on cash basis. I t would be very interesting to know the number of us who are working and are not on the statistic tables).
Vermont has an average income slightly over $28,000, or about $76 a day. These execs have an average of $5,357, a day, give or take a few bucks. No wonder Vermonters are chilled by more than heating costs for their homes.
In the same financial section is an article by Gretchen Morgenson, a very acute reporter, slugged Enriching a Few At the Expense of Many. In it she interviews Albert Meyer, a money manager at Bastiat Capital in Plano, Texas.
Mr. Meyer calls most corporate compensation plans a form of insider trading and stock-watering. He compares Exxon Oil with Statoil, a Norwegian company. Statoil has had an average increase of 22% a year in stock price during the last decade, while Exxon is at 11.4%.
The chief executive of Statoil received $1.8 million in 2010 and no stock options.
The C.E.O executive at Exxon received $21.7 million in salary, bonuses and stock awards in 2009 and the figures for 2010 will probably be higher.
American C.E.O.’s and their boards are ripping off the stockholders. Comparisons of pay with global companies outside of America compare to what American CEO’s are paid is shocking.
Why do the American C.E.O.’s need so much money? What sort of greed is feeding this cannibalism? Why are our regulatory boards allowing this?
It appears to be based upon the Mafia business model of pay off, bribes, fancy accounting, legal jibes and watch out for yourself.
In the context of America, Vermont does not count unless we come up with systems that are not self serving and benefit the average Vermonter. Then the rest of the country can see a model that works for its citizens. Vermont should distance itself from this sort of gekkoism.