CEO pay still shooting up as layoffs start to hit
By Anthony Arnove | April 27, 2001 | Page 2
WASHINGTON--The gap in pay between U.S. workers and their bosses has grown so big that Business Week is running out of ways to describe it. "We're back to serfs and royalty in the Middle Ages," Edward Lawler, a management professor at the University of Southern California's Marshall School of Business, told the magazine for its annual CEO pay issue.
According to the survey, CEOs at 365 of the largest public U.S. companies earned an average of $13.1 million last year. That's 531 times more than their average employee. These bosses raked in $50,384 for every "working" day--almost twice what an average worker makes in a year.
With layoff announcements hitting right and left, U.S. workers are expecting tougher times ahead. But "don't expect CEOs to share the pain," says Business Week. The magazine predicts that the ultra-rich will actually do even better in the coming years--thanks to George W. Bush's tax-cut giveaway, which will mainly benefit the richest 1 percent of households.
Indeed, the economic slowdown and plummeting stock market had little impact on CEO compensation, which is up by 434 percent since 1991, according to Business Week. If the minimum wage had matched that pace of growth, it would now be more than $24.50 an hour.
The winners of the 2000 CEO greed and sloth award included:
--Citigroup CEO Sanford Weill, who took home $224 million.
--Disney's Michael Eisner, who "earned" a mere $72 million in salary and long-term compensation.
--Apple CEO Steven Jobs, whose bonus this year was his own $90 million Gulfstream V jet.
Business Week had to admit that CEOs were paying themselves at "indefensibly high levels." Why is this shamelessly pro-corporate magazine suddenly concerned? Because it's worried about what will happen in the recession, when workers lose jobs at companies that pay their executives like kings. As Business Week concluded, "Let the pay that CEOs earn keep rising--and watch the economy--and execs might well remember the fate that has awaited royalty in the past."