Executive pay keeps rising despite “competitive business environment”
by David Atkins
One of the most frequently offered explanations offered by conservatives for declining wages and the need to cut pay in “right to work” states is that American corporations must stay competitive with foreign competition. If workers’ salaries are inflated, it is argued, then prices will need to rise, causing foreign companies to undersell their goods to the American market.
Thus, the argument goes, pay for regular Americans must go down. But if that’s the case, how do they explain this?
Despite a lot of noise from shareholders and a few victories at big names like Citigroup and Hewlett-Packard, executive pay just keeps climbing.
Yes, some corporate boards seem to be listening to shareholders, particularly on contentious issues like the seven-figure cash bonuses that helped define hyperwealth during the boom. Since the bust, corporate America on the whole has moved to tie executive pay more closely to long-term performance by skewing executive paychecks more toward restricted stock, which can’t be sold for years.
But rewards at the top are still rich — and getting richer. Now that 2011 proxy statements have been filed, the extent of executive pay last year has finally become clear. Median pay of the nation’s 200 top-paid C.E.O.’s was $14.5 million, according to a study conducted for The New York Times by Equilar, a compensation data firm based in Redwood City, Calif. The median pay raise among those C.E.O.’s was 5 percent. (The full list is available here.)
That 5 percent raise is smaller than last year’s. But it comes at a time of stubbornly high unemployment and declining wealth for many ordinary Americans. Even corporate pay experts say that this is hardly the kind of change that will quell anger over the nation’s have-a-lots by the have-lesses, particularly in an election year.
If competitiveness is the issue across the board, then that competitive business environment should apply to executives as well as mail room clerks.
But it doesn’t. American corporations have record profits. Executives are making more money than ever. “Competitiveness” has nothing to do with it. Greed and outright theft does.
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