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Survey: Only Executives Expecting Pay Raises

The economy may have been shaky in 2010 but corporate profits were up and CEOs reaped the rewards in their compensation packages. How much? BNET's Kimberly Weisul reported "median CEO compensation rose an impressive 35 percent, according to a preliminary survey from Governance Metrics International," while the New York Times just announced the results of a review of executive pay conducted for the paper by Equilar which found "the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009."

So whether the figure is 35 or 23 percent, C-suite compensation definitely soared by double digits. How is the rest of America doing? If you were looking for feel good news, stop reading now. Twice a month the American Pulse survey asks 5,000 Americans about their financial fortunes. When the pollsters hit the phones in early June they didn't hear much optimism. Commodity prices may be surging (OK, here's a more serious link on the subject) but Americans in general, unlike top executives, are not set to see pay rises to compensate.

A whopping nine out of ten of those with jobs don't expect a raise next year.

So how are squeezed consumers handling a simultaneous stasis in pay and increase in expenditures? By economizing, of course. Respondents told American Pulse they were,

  • Only buying necessities: 70. percent
  • Driving less: 63.4 percent
  • Spending less on clothing: 58.9 percent
  • Comparison shopping: 53.1 percent
  • Sticking to a strict budget: 50 percent
  • Buying more store brand/generic products: 49.9 percent
  • Spending less on groceries: 42 percent
Alain Sherter has argued on BNET that CEO pay drags companies down, with one analysis finding that "one-third of companies paid more in cash comp (meaning salary plus bonus) to their top five executives than they spent on audits by outside accounting firms" and for 13 percent of technology companies "median executive pay amounted to more than 5 percent of the firms' total research and development costs." Obviously, executive pay rises are coming at the expense of other priorities. It looks like raises for the rest of us might be among them.

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(Image courtesy of Flickr user Neubie, CC 2.0)