CEO pay in the U.S. was up 12 percent last year, averaging about $9.6 million. Fourth quarter profits for United States businesses grew at a 30 percent rate, the most in several years of Sundays. CEOs have been seeing outsize pay increases while at the same time the rank and file has worked increasingly harder for the same amount of money. Resource for this article – CEO pay soars as flat middle class wages erode with inflation by MoneyBlogNewz.
CEO pay rises at the expense of U.S. workers
The pay of CEOs has increased during the recession, while the normal hard working American’s has declined. Even as employment is increasing, employee pay isn’t, however CEO pay is. Over 13 million people are currently looking for work, yet CEO’s are getting by on what they already have and increasing their own wallets. There seems to be little reason for a CEO to hire more employees. Last year, an average of 12 percent raises was given to CEO’s by economic bail out sectors. Yet, private sector pay rose by about 2 percent. Unemployment hovered at 8.8 percent in March. Most economists predict the jobless rate will continue to remain high for years.
CEO stock options on the rise
The richest CEO of 2010 was Phillipe Dauman of Viacom, making in only nine months $84.5 million. Ray Irani of Occidental Petroleum made $76.1 million past year, making him take the place of the second highest paid CEO. Larry Ellison of Oracle, the third-richest American with a net worth of $39.5 million according to Forbes, took home $70.1 million. Fueled by Wall Street, CEOs are raking in the biggest paydays since 2007 with stock opportunities. Many CEOs accepted stock opportunities during the recession when they held little value, knowing that huge paydays lied ahead when the market recovered. CEOs are now cashing in on their stock choices and making the millions they anticipated. There was well over $20 million made by several CEOs cashing in their stock options according to USA Today.
The increasing commodity costs impact middle class
The huge CEO pay increases are hard to swallow for the American middle-class, who has viewed wages stagnate for a generation. In the last five months, wages for U.S. hourly workers have not increased one penny, according to the Bureau of Labor Statistics. While United States workers who nevertheless have jobs are not getting raises, employers in creating nations are hiring new consumers who are pushing up demand and prices for food, oil, cotton and other commodities. The direction of costs of products and income are going in different direction. Gas costs alone eat up more than half the average worker’s wage increase. The average middle-class employee buys about 12 gallons of gas a week alone. People have reported that filling a gas tank is costing $40 more per month than it did past year. Yet the average weekly raise only increased by about $18.
Information from
New York Times
nytimes.com/2011/04/10/business/10comp.html?_r=2#38;ref=business
USA Today
usatoday.com/money/companies/management/2011-04-04-1Aoptions04_ST_N.htm
NPR
npr.org/2011/04/10/135272006/paychecks-cant-keep-up-with-rising-prices
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