According to the findings in the report by the Institute for Policy Studies and United for a Fair Economy, between 1990 and 2000:
- the S&P 500 increased by about 300%
- corporate profits went up by 114%
- yet executive pay surged by 571% on average
- while workers only received pay hikes of 37%
- barely outpacing inflation, at 32%.
The report, Executive Excess 2001: Layoffs, Tax Rebates and the Gender Gap, Eighth Annual CEO Compensation Survey, also points out that if the minimum wage had kept pace with CEO pay over the last 10 years, it would be $25.50 as opposed to $5.15 today.
And if worker pay had risen at the same rate as CEO pay, the average worker would be earning $120,491 per annum as opposed to the $24,668 received on average.
Lean and Mean
The study, quoting findings from a Business Week survey of 365 firms, also points out that on average, CEOs of firms that cut 1,000 or more jobs this year earned an average of $23.7 million in total compensation, compared with a $13.1 million average for executives as a whole, about 80% more.
In addition, between 1999 and 2000:
- executives’ cash-based compensation increased by 18%
- compared to salaried employees, whose cash-based compensation was up by 4% and
- hourly wage workers, where the increase was 3%.
According to the report, between 1996 and 1998, 41 large, profitable corporations used special tax breaks and credits to reduce their corporate tax bill to less than zero.
The CEOs of these firms averaged pay raises of 69%, in comparison to a raise of 38% for the typical CEO.
Those increases, made possible in part by tax rebates, added up to $194 million, and in six cases, the CEO ‘s raise entirely consumed the company’s tax rebate for the year.