Comments on: Shrinking corporate officer pay Sat, 23 Mar 2013 13:49:31 +0000 hourly 1 By: LVTfan Mon, 19 Sep 2011 17:11:48 +0000 Potatoe1 — when you talk about the “many shareholders,” are you aware how concentrated the ownership of equity in publicly held companies and of privately held businesses is?

According to the 2007 Survey of Consumer Finances (published by the Federal Reserve Board), “EQUITY” — stocks, whether held directly, via mutual funds, retirement accounts or even trust funds — is distributed as follows:
Top 1%: 36.0%
Top 5%: 66.5%
Top 10%: 78.9%

The ownership of privately held businesses (“BUS” in SCF parlance) — importantly, a larger figure than “EQUITY”! — is as follows:
Top 1%: 62.7%
Top 5%: 88.1%
Top 10%: 93.6%

(Combined, those figures are 49.9%, 77.8% and 86.6%.)

It is true that 51.9% of us have SOME “EQUITY” but most of it is in relatively few pockets. However, your point about the distribution between shareholders and officers is quite accurate as well.

We ought to be more interested in the structures that permit corporations to — quite legally! — privatize value we all create together. THAT is where the real story is.

By: Potatoe1 Sun, 18 Sep 2011 19:44:09 +0000 Officer pay is going down a bit, but it is going up as a percentage of profits. That is the real story here. Concentration of wealth in the hands of the few and not the many shareholders.

By: DavidCayJ Sun, 18 Sep 2011 18:19:22 +0000 @seattlesh, average and mean are the same; I suspect you seek the median (half more, half less). The data do not allow that computation or I would have calculated it.

Note to readers working at the IRS Statistics of Income division: adding a MEDIAN line to reports would be invaluable.

My articles were the first to expose the hidden subsidy in executives’ personal use of corporate jets, explaining the economics, history and side effects. You can read this also in chapters of my books Perfectly Legal (“Plane Perks”) and Free Lunch (“Without Even Asking” and “Beauty and the Bounty”).

You and some others here also seemed to miss the point of my column — that what is true of CEOs is not true of corporate officers as a whole.

The data are about corporate officers as a whole, who are for sure very well paid, but are not in league of the most overpaid CEOs, who I show with a specific example sometimes see their pay rise as shareholder wealth evaporates.

One implication of this new data is that executives at the very top are squeezing not just the rank-and-file (whose stagnant pay I have been documenting for many years) but ALSO those just below them.

So, please, carefully re-read from the start, especially the 6th and 7th paragraphs.

By: seattlesh Sun, 18 Sep 2011 15:13:40 +0000 Were these figures “distilled” in a brewery. Even Mr.Johnston knows that the “average is far less meaningful than the “mean” or “weighted average”. Bur even using your average figure of $471,500 that is roughly 31 times the income of a full time minimum wage earner. Does this compensation include perks such as the use of a corporate jet, corporate vacation homes or borrowing from the corporation at below market rates. And what about deferred compensation or stock options?

It is interesting that you write this article just as President Obama proposes a ‘millionaire” tax. But not to worry, according to Mr. Johnston’s figures the average CEO has nothing to worry about so why the big outcry?

By: Sun, 18 Sep 2011 14:12:24 +0000 and this is while blowing $300,000+ per new job created?

By: LVTfan Sun, 18 Sep 2011 13:43:39 +0000 Let me get this straight. 1 for the officers, 2 for the shareholders? And we don’t consider that a mite high? Aren’t compensation committees supposedly working for the shareholders?

Given all the people with business skills in this country, couldn’t the shareholders do better with management teams who might work for a bit less?

By: borisjimbo Sun, 18 Sep 2011 08:00:33 +0000 Time for some reforms to corporate law regarding compensation committees.

By: slnsimhan Sun, 18 Sep 2011 01:47:34 +0000 Once again we seem to discuss this rip off every year as in the past ten years, with no change but for the worse for the share holders. Even worse, the corporations worldwide are starting to emulate this potentially explosive (in their consequences) inflated Chief Executive remuneration model, which are constantly reported and justified in mystifying terms for simple share holders to understand and act. There are still some company owners and chiefs who are reasonably compensated and I thankful to and feel sorry for them as they may deserve more recognition if not compensation. It is a pity that even if shareholders propose and vote for CEO pay limits, the board can ignore it – Antiskeptic

By: Conservastore Sun, 18 Sep 2011 00:34:42 +0000 thanks for the mention of john snow-he seems to always be slightly ahead of the sinking ship as he was in setting up the pre-lehman explosion economy pre paulson-believe he then parachuted to a pe firm that had made some poor choices for investments as well-ahh the greed of american ceo’s which at times helps us but usually hurts us alot-a quick fix is the ratio of lowest paid/highest paid in a firm be held the same always and ratified by all boards

By: doggydaddy Sat, 17 Sep 2011 21:19:38 +0000 CEO pay is soaring; company profits are up; the US is on the verge of collapsing under the weight of its own debt; Medicare, Medicaid, and Social Security have been put on the chopping block; and yet the winning argument in the tax/debt debate is that the wealthy should not have to pay any more in taxes despite the fact that they’re currently paying taxes at historically low levels. In fact, Republicans want to lower taxes on the wealthy even further.

And to add insult to injury, most of the money that we’ve been borrowing from China and other foreign countries has been going into the pockets of the wealthy, the very ones who are being protected by our elected representatives from having to pay higher taxes. Defense contractors; the banking industry; Wall Street; the Healthcare Industry; the Oil Industry; them, and the affluent in general, are being protected by our government while the vast majority of Americans are being run through the economic meat grinder. They are extracting this money from us and sending it overseas.

It’s crazy. But what’s really crazy is that we put up with it. In fact, we just swept into Congress the Party who have made this insane tax dynamic the cornerstone of their ideology. Cut everything that helps the Middle Class and the poor and do everything that helps the rich get richer, as if trickle down economics really worked.

But in the name of bipartisanship, the Democrats are doing very little to change this dynamic. When it comes down to it, they aren’t going to do a whole lot to upset the apple cart. They may be opposed to it ideologically, but they’re even more opposed to biting the hand that feeds their campaigns. Who’s feeding their campaigns? Defense contractors; the banking industry; Wall Street; the Healthcare Industry; the Oil Industry; them, and the affluent in general.

I’m not against the rich. I’m against the rich who are using their money to corrupt our government in a way that enables them to get richer at the expense of my country.

It’s the corruption, stupid. Even before the economy, because the economy will never really be fixed for 99% of Americans until we get rid of the corruption in our government. It should be our #1 priority.

Until we do something to put an end to the corruption in our government, we are doing this to ourselves.