It is 7 am here and I am about to turn on Wimbledon, but I had to write about this first. Surfing the headlines in the New York Times this jumped out at me: ” We Knew They Got Raises. But This?”
The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. The earlier study had put the median pay at a none-too-shabby $9.6 million, up 12 percent.
Total C.E.O. pay hasn’t quite returned to its heady, prerecession levels — but it certainly seems headed there. Despite the soft economy, weak home prices and persistently high unemployment, some top executives are already making more than they were before the economy soured.
Pay skyrocketed last year because many companies brought back cash bonuses, says Aaron Boyd, head of research at Equilar. Cash bonuses, as opposed to those awarded in stock options, jumped by an astounding 38 percent, the final numbers show.
Granted, many American corporations did well last year. Profits were up substantially. As a result, many companies are sharing the wealth, at least with their executives. “We’re seeing a lot of that reflected in the pay,” Mr. Boyd says.
So if companies are making money again, why aren’t they using some of that profit to hire people. you might wonder. But I also want to know is what kind of taxes are these guys, and I’m sure they are 99% men, paying? (I noticed that one person mentioned is Warren Buffet who thinks he ought to be paying more in taxes.) I think that any of of these executives can afford higher taxes more than I, as a public employee, can afford an increase in health insurance premiums while getting no incease in pay. Or than the man or woman retired on just a public pension or just social security can afford to pay for health insurance on the private market – even with a Paul Ryan voucher.
Philippe Dauman of Viacom led the executive pay list in 2010. The median was $10.8 million
Meanwhile there are the rest of us.
Of course, these sorts of pay figures invariably push the buttons of many ordinary Americans. Yes, workers’ 401(k)’s are looking better than they did in some recent years, but many investors still have not recovered from the hit they took during the financial crisis. And, of course, millions are out of work or trying to hold on to their homes — or both.
And it’s not as if most workers are getting fat raises. The average American worker was taking home $752 a week in late 2010, up a mere 0.5 percent from a year earlier. After inflation, workers were actually making less.
Yes, as the story points out, stockholders can vote on the executive pay plan and yes, some corporate heads don’t get salaries just stock like Buffet, but the question remains: What is wrong with raising the tax rates on people that make this type of salary? If the argument that the Republican’s are making, that companies need their profits in order to create jobs, then where are the jobs? I think the Democrats have a powerful argument. They just need to get the story out.