Tuesday, May 8, 2007

Pay for Performance-Hard Out here for the Pimp!

The Corporate Library reports that Chief Executive Officer (CEO) pay tripled from 1990 to 2004 compared with an 87% increase in corporate earnings!

In 2005, the average CEO in the United States earned 262 times the pay of the average worker, the second-highest level of this ratio in the 40 years for which there are data.

A CEO earned more in one workday (there are 260 in a year) than an average worker earned in 52 weeks.

In 2005, an average Chief Executive Officer (CEO) was paid 821 times as much as a minimum wage earner, who earned just $5.15 per hour.

An average CEO earns more before lunchtime on the very first day of work in the year than a minimum wage worker earns all year.

In the rarefied air of corporate board rooms, directors are paid more for a handful of meetings than minimum wage workers make in a year. Directors who establish CEO compensation, usually CEOs themselves, sit on executive compensation committees, and reward their country club colleagues princely sums without regard to company performance. As Paul Hodgson, the author's study, commented" Far too much executive compensation is delivered without a link to corporate performance."

The astronomical salaries, laden with perks including country club memberships, private planes, second homes, private school tuition, and stock options, are said to reflect the laws of supply an demand. Nothing could be further from the truth! CEO's understand solidarity better than most blue collar workers. They ensure their class brethren are handsomely rewarded because it will set a "benchmark" for their own compensation. Call it "the race to the top."

This is nothing more than crony capitalism. Now we know what Three 6 Mafia in the film Hustle and Flow meant when it sang:"It's hard out here for a pimp!"

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