May 31, 2004

CEO compensation keeps rising



David Batstone writes in the Worthwhile Mag:

"A new report reveals that CEO total compensation in the S&P 500 rose by a median of 27.16 percent in 2003, nearly three times the rise seen for 2002, when total compensation rose a healthy 11.48 percent. Every element of pay tracked (base salary, annual compensation, restricted stock and other long-term incentives) rose in value over the last year save one: the value realized from the exercise of stock options actually fell, by a median of 1.01 percent.
What is worse than mockery? Disdain. That's exactly how many rank-and-file workers feel they are being treated. Over the past several years, most workers have seen their pay packages hold steady, if not decline. "


My comment:
In India we've had discussions triggered by certain leaders that there have got to be some ratio beyond which CEO salary should not rise. And figures like 1:25 of lowest pay in the organization and CEO pay have been bandied about. But in India at least (and I suspect, other countries too) there are a lot of CEO perks that never get valued in the annual report of the organization. And further complicating the scenario is the salaries of promoter-CEOs who take home pays like $ 1.8 m !