Unique Original Articles » CEOs give themselves large raises while wages go nowhere

Compensation for chief executive officers at U.S. corporations increased 12 percentage points last year to reach a median figure of $9.6 million. In the final quarter of 2010 corporate profits grew faster than they have in over 60 years-30 percent. As CEOs padded their paydays, middle-class workers have had to make do with less as inflation cuts into income.

Working class pays CEO's

The average CEO has had no troubles during the recession. As a matter-of-fact, their pay has really increased. The economy is beginning to rebound and executive pay is increasing, however employee pay is still constant with the recessions drop. As corporate profits soar, stock prices rise and productivity increases, CEOs can increase their own pay but do not have to hire or award employees with rises because more than 13 million individuals are looking for work. There is no incentive to retain workers or entice new employees. In 2010, an average of 12 percent raises was given to CEO's by economic bail out sectors. In the mean time, average pay for private sector workers grew about 2 percent. 8.8 percent was the average joblessness rate in March. Most economists predict the jobless rate will continue to remain high for years.

CEOs rake in huge stock choices

The richest CEO of 2010 was Phillipe Dauman of Viacom, making in only nine months $84.5 million. The rising price of oil and gas has been good to Ray Irani of Occidental Petroleum, who was the runner up with $76.1 million, a 142 percent pay increase over 2009. Larry Ellison of Oracle, the third-richest American with a net worth of $39.5 million according to Forbes, took home $70.1 million. Wall Street has made it so CEOs are making more money with stock possibilities than they have made since 2007. Several CEOs accepted stock opportunities during the recession when they held little value, knowing that huge paydays lied ahead when the market recovered. Thanks to taxpayer bailouts and interest-free leverage offered by the Federal Reserve, the stock market has recovered spectacularly and the CEOs are cashing in. There was well over $20 million made by several CEOs cashing in their stock options according to USA Today.

Middle-class wages hit by rising commodity costs

Middle-class America is having a hard time with these payments to CEOs since they have had difficulty with pay increases. In the last five months, hourly wages haven't increased by as-much-as a single penny according to the Bureau of Labor Statistics. While U.S. workers who nevertheless have jobs aren't getting raises, employers in developing nations are hiring new customers who are pushing up demand and prices for food, oil, cotton and other commodities. The direction of costs of goods and income are going in different direction. Gas is the biggest thing hurting the American worker. The average United States commuter buys 12 gallons of gas a week. Filling the tank, costs about $40 a month more than in 2010. Meanwhile, the average weekly wage is up just $18 from last year.

Citations

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