A study by two groups says chief executives of corporations making profits from the war on terror are enjoying far bigger pay increases than CEOs of non-defense companies. The report also finds the top 15 oil companies gave executives a fifty percent increase in pay, as consumers began paying $3 a gallon for gasoline. Houston Public Radio Business Reporter Ed Mayberry has more.
The study finds that, on average, CEOs of corporations with extensive defense contracts are making double what they did before 9-11. The study was conducted by the Institute for Policy Studies and United for a Fair Economy. The Top 15 oil company CEOs got pay increases last year, even as consumers started paying $3 per gallon for gas, according to Chuck Collins with the Institute.
“In one, on average, each of the CEOs of those companies got a 50 percent raise. The average salary for the Top 15 oil companies is about $32.7 million, which is three times more than the average CEO in the United States. Today, overall, it’s 411 times the average worker pay.”
Houston is headquarters for many oil and gas and oilfield services companies.
“The top income earner there in Houston was the CEO or Marathon, Clarence Cazalot, and he got a 780 raise over 2004. Now, you have to wonder, what could anyone do so exceptional to earn a 780 percent raise. It would take the average construction laborer at Marathon about 1,727 years to earn Clarence Cazalot’s salary.”
The companies are making huge profits, so why not compensate the executives at the top?
“Too much runaway pay at the top signals that the board is unable to provide and ensure accountability at the top, because a lot of these pay packages have been going up regardless of performance. And I think that overall the trend tracks just a widening gap between the rich and everyone else in the country, which has a number of downsides. I think it’s just bad for the economy, it’s bad for democracy. (It) ends up, I think, being bad for the culture when people don’t feel like they’re all in the same boat.”
Collins says there’s an accountability problem, and perhaps shareholders should have a say on executive compensation. He says there’s no sense of embarrassment for riches.
“You know, I think if there had been embarrassment, we would, we would have seen something change a while ago. We seem to be beyond shame and embarrassment here. We just need some adult supervision. We need, shareholders should have veto over excessive pay. Taxpayers shouldn’t have to subsidize corporations that deduct excessive pay.”
The study focused on the pay of the CEOs of the 34 publicly traded U.S. corporations that were among the top 100 defense contractors in 2005. The two groups calculated the pay packages based on salary, bonuses, stock awards, long-term incentives and the value of stock options exercised in any given year. Ed Mayberry, Houston Public Radio News.