CEOs got 23 percent pay raise in 2010, study shows
The CEOs of most S&P 500 companies raked in an average compensation of $11.4 million in 2010, amounting to a 23 percent pay raise over 2009, according to a new study from labor union coalition the AFL-CIO.
The AFL-CIO compiled the data as part of its Executive Paywatch initiative, which aims to make information on executive compensation more transparent and to create more accountability. It shows that in 2010, the average S&P 500 CEO made 343 times more than an average worker in his company, compared with just 42 times more in 1980.
As the gap between CEO and worker compensation widens, the AFL-CIO is urging Washington to close corporate loopholes and stop the Republican-led effort to repeal parts of the Democratic Wall Street reform legislation.
"Today's launch of 2011 Executive PayWatch shows just how out-of-whack things are," AFL-CIO President Richard Trumka told reporters today. "Despite the collapse of the financial market at the hands of executives less than three years ago, the disparity between CEO and workers' pay has continued to grow to levels that are simply stunning."
The report released today examined CEO compensation from 299 S&P 500 companies because the 2010 data for the rest of the CEOs in that group is not yet available, the AFL-CIO said. Calculating CEO compensation is difficult for a group like his, Trumka said, and even more difficult for an average shareholder to "ferret out."
Trumka said the Wall Street reform legislation Democrats passed last year should have a "moderating effect" on CEO compensation since one provision of the law requires publicly traded companies to disclose the ratio of CEO pay to the median of the pay of all other employees.
That provision of Wall Street reform, however, is just one of a handful of reforms that Republicans are now seeking to roll back. Republicans argue this new rule places an "enormous burden" on companies.
"At a time of high unemployment and economic uncertainty, we must not put new obstacles in the way of hiring and recovery," Rep. Nan Hayworth (R-N.Y.), the sponsor of the bill to repeal the provision, said in a statement. "The Dodd-Frank Act disclosure requirement will be costly and time-consuming for employers, will serve no useful purpose for company shareholders, and will divert resources from job creation."
Trumka said the effort to roll back that provision "will surprise and offend most Americans" and accused Republicans of ignoring middle and low-income Americans in other parts of their agenda as well.
He called Republican Rep. Paul Ryan's proposed 2012 budget a "job-killing bill" and "nothing more than a wealth transfer from poor and middle-class America to people like... CEOs."
The AFL-CIO is also urging company shareholders to take advantage of their right to hold annual, non-binding votes on compensation packages for top executives -- another form of oversight the Wall Street reform legislation created.
As the labor union group reaches out to shareholders and lawmakers, it's also making data on CEO compensation available to the public at its website Paywatch.org. The site compares CEO compensation to workers' pay through a searchable online databank, as well as with a Facebook application.
The site targets six companies with pay practices that have been flagged as troublesome by the Council of Institutional Investors. Among the executives featured is Mark Hurd, who resigned as chairman, chief executive officer and president of Hewlett-Packard in August 2010. Hurd received more than $23.8 million in compensation in 2010, even though he resigned following sexual harassment allegations from a former Hewlett-Packard contractor.