It's heartening to know that some people in the United States have rebounded from the recession stronger than ever.
Unemployment is now around double what it was in the pre-recession "Golden Age" of 2007; about one in seven Americans rely on food stamps; and the poverty rate is the highest it’s been since 1994. But as the AP reported on Friday, "CEOs at the nation's largest companies were paid better last year than they were in 2007."
Standard & Poor's released its list of the 500 highest-paid CEOs in 2010 on Friday. The AP analyzed the findings:
The typical pay package for the head of a company in the Standard & Poor's 500 was $9 million in 2010, according to an analysis by The Associated Press using data provided by Equilar, an executive compensation research firm. That was 24 percent higher than a year earlier, reversing two years of declines.
Executives were showered with more pay of all types — salaries, bonuses, stock, options and perks. The biggest gains came in cash bonuses: Two-thirds of executives got a bigger one than they had in 2009, some more than three times as big.
The highest-paid CEO in 2010 was Philippe Dauman of Viacom, the entertainment company that owns MTV and Paramount Pictures. Six other of the top 10 highest-paid CEOs also come from the media and entertainment industries. Dauman received a package valued at $84.5 million.
A combination of reasons account for the extraordinarily high remuneration CEOs are getting: soaring corporate profits and a bull market in 2010, to name two. But accounting for and justifying are two very different beasts indeed.
AS AFL-CIO President Richard Trumka said last month, responding to a study which yielded similar findings to S&P's 500:
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.
As the AP notes, for those at the top, "it's as if the recession never happened." One of the key lessons impressed upon the Financial Crisis Inquiry Commission, in a testimony by none other than Warren Buffett, CEO of Berkshire Hathaway, was that extravagant pay for CEOs is dangerous when no negative risk comes with it.
I think that when society has to step in to save institutions for societal reasons, that the CEO should basically go away broke, and I think his spouse should go away broke. I think there should be a real downside, and I think incentives are an important aspect in behavior.
What's clear today, however, is that the 500 highest-paid CEOs can pretty much act with impunity and without care for the millions of struggling Americans; regardless of their companies' fates and the decisions they make, these business leaders need never live outside of extreme wealth.
Here is the top five list, with their estimated 2010 pay packages:
1. Philippe Dauman, Viacom, $84.5 million
2. Ray Irani, Occidental Petroleum, $76.1 million
3. Leslie Moonves, CBS, $56.9 million
4. David Zaslav, Discovery Communications, $42.6 million
5. Richard Adkerson, Freeport McMoran Copper & Gold, $35.3 million