It's one thing for business executives to enjoy double-digit, perk-laden pay increases in good economic times. It's far more galling to see Olympian leaps in compensation at the top when the country's clawing its way out of the nastiest decline in a generation or longer and when the vast majority of those workers who still have jobs have seen more wage cuts than raises in recent years.
Compensation consulting firm Equilar crunched some compensation figures that show the median pay for top executives at 200 big companies last year was $10.8 million. That's a 23 percent gain from 2009. Let me repeat:
Up 23 percent from 2009.
How big was your last raise?
Equilar's analysis was done for the New York Times with results appearing in the newspaper's Sunday business section. Equilar found that pay skyrocketed last year because many companies brought back cash bonuses. Those bonuses, as opposed to those awarded in stock options, jumped by 38 percent, the final numbers show.
The nationwide executive pay bonanza gels with a recent analysis by the St. Petersburg Times of the CEOs running the 10 biggest public corporations based in Tampa Bay. This newspaper found that the average CEO compensation package here last year totaled $5.4 million.
While three of the top 10 CEOs took in less money last year, five received at least a double-digit percentage increase. Two nearly tripled their take-home pay, and one doubled it.
Nice paychecks if you can get them. In contrast, average wages in the bay area last year fell just over 1 percent to $38,382, the Tampa Bay Partnership reports.
A conventional explanation for this runaway exercise in wallet-gorging is that Corporate America's performing well, making good profits and generally watching stock prices rise. Those are all traditional ingredients that translate to higher pay, plus bonuses, for top executives running such corporations.
What's different, of course, is that many corporations fired a ton of people during the darkest days of the recession and, overall, are now hiring very few of those workers back. Companies that are investing at all tend to be putting their money into new technology and other productivity tools that allow them to prolong the No. 1 lesson learned by American companies during this recession:
Hiring people full time, complete with paycheck and retirement benefits and health care subsidy, is expensive and risky when it's unclear whether the economy really is recovering.
Better, executives argue in unison, to sit on mountains of corporate cash and invest it when the economic vibe feels stronger.
Except, of course, when executives happily go along with padding their personal coffers while most workers see their pay languish.
Is this fair? Everyone in a bad recession should bear some of the brunt of slower growth and economic pain.
To those who say fairness is irrelevant, who claim those executives making these companies cash-rich should be entitled to their hefty 23 percent rewards, I say "No way."
It's one thing to temper executive pay hikes in tough national economic times. It's another to let senior management alone feel like they've won the lottery. Yet again.
That's a trend line that won't end well at all.
Contact Robert Trigaux at [email protected]