Tuesday, April 20, 2004

Amazing executive raises

Title: Time Warner, Gillette, Citigroup CEO Pay Outpaces Stock Gains
Source: Bloomberg
Date: April 19, 2004

From the article:
    Time Warner Inc. quadrupled the pay of Chief Executive Officer Richard Parsons to $13.9 million last year, while the company's shares failed to recover all the value lost during his tenure.

    At Gillette Co., CEO James Kilts' compensation soared 59 percent to $17.6 million while shares climbed 21 percent.

    CEO pay at 70 of the 100 largest U.S. companies rose to an average $14.1 million last year, according to data compiled by Bloomberg.

    That was 384 years of the average U.S. employee's 2003 pay of $36,764, and 525 years of a production worker's salary of $26,902, according to the Bureau of Labor Statistics.
There is no economic reason for this phenomenon.

Note that this article mentions only CEO pay. However, it is safe to say that all executive compensation is rising at the same pace -- hundreds of executives (CFOs, COOs, CIOs, VPs, directors, etc.) in each company are seeing their pay rising at a remarkable rate.

We are all paying for it. The prices of everything we buy are higher in order to pay for these amazing executive salaries. Meanwhile, the wages of everyone else stagnate or fall. That is how the concentration of wealth works.


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