WHY CEOS ARE GIGGLING

In today’s economy – with jobs down, wages down, housing down, stock prices down, etcetera – it’s hard to find any economic indicator to make us smile. So – why do I hear giggling?

In today’s economy – with jobs down, wages down, housing down, stock prices down, etcetera – it’s hard to find any economic indicator to make us smile. So – why do I hear giggling?

Ah, yes. It’s coming from up there, up in the executive suites, where corporate CEOs are snickering about the one indicator that always seems to go up: their own pay. According to an Associated Press survey, the median pay for honchos of the biggest U.S. corporations jumped up to $8.4 million last year. In many cases, their haul was much more. Each of the top ten, for example, took between $34 million and $83 million in pay. Assume that the $83-million man put in 10 hours a day every single day of the year; that’s more than $22,000 an hour for him.

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Lest you think that these sultans of commerce are paid on the basis of performance, note that half of them were at the helm of corporations that suffered dramatic profit losses last year. Check out Rick Wagoner of General Motors. Thanks to poor management, GM lost $39 billion in 2007, saw its stock price plummet 19 percent, and has now announced that it will close three U.S. factories and dump another 3,500 auto workers. But Rick got a 64 percent pay increase, raising him to $15.7 million. No wonder he’s giggling.

Jeffery Mezger is another giggler. He’s CEO of the home-building outfit known as KB Home, and his contract calls for him to get a cash bonus based on KB’s profits. Alas, there was zero profit last year; in fact, the corporation lost nearly a billion bucks. But Mezger still got his – a $24 million payday that included $6 million in bonus money.

These executive paychecks are not merely a ripoff, they’re obscene.

“Amid slumps, CEOs richer,” Austin American Statesman, June 16, 2007.

“GM to cut truck shifts, leading to layoffs,” www.msnbc.msn.com, April 28, 2008.

“GM to lay off 3,500 at 4 pickup truck and SUV factories,” www.huffingtonpost.com, April 28, 2008

“Battling the bastards is about as much fun as you can have with your clothes on.”

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