Rick Raw:Obscene CEO Salaries–Money for Nothing and the Perks for Free

By Rick Grant rickgrant01@comcast.net www.rickatnight.com

In a world of continuing outrages against the middle-class with unfair taxes, Washington lawmakers giving themselves raises, and a rigged system to limit working-persons’ income, here’s a statistic that caused my blood to boil: The ratio of CEO-to-worker pay hit a peak of 525-to-1 in 2001. It has stayed in that relative ratio ever since.

Yeah, these soulless greed-mongers running the corporations are literally draining their respective company’s financial resources with no incentive to help the company prosper. The cumulative pay of the top 10 highest paid CEOs in the past 15 years was a whopping $11.7 billion. A case in point, Forbes.com says that Citigroup’s Sandy Weill has made $1.1 billion since 1990. And you thought Mick Jagger was filthy rich. He’s just a poor rock ‘n’roll musician by comparison.

In 2007, despite efforts by the SEC to rein-in bloated Chief Executive Officers' salaries, CEOs of major corporations found surreptitious ways to skirt the rules and receive obscene amounts of money in stock options and pay as compensation for mediocre performance. Then, when the board of directors finally ousted them, they got the equivalent of a bonus for a not doing a good job called "the golden parachute"–costing the company millions of dollars down the drain.

How can any one person be worth these stagging amounts of money. The truth is, they’re not. CEO’s are hired because of their Wall Street influences and their image to brand the company with their particular style of "leadership." It’s more about the prospect’s ability to maneuver in the new global economy and raise the value of the company stock, serving the interests of the shareholders.

Somewhere along the line, the CEO’s reason for being on the job gets perverted by their greed addled motivation to take the company to the cleaners before they’re fired, then move on to the next suckers. These guys make Al Capone look like a Boy Scout.

Enron may have been an extreme example of CEO’s skulduggery, with the top executives indicted and jailed. But, Enron’s honcho, Ken Lay had the good sense to die before he served any time. However, CEOs still have carte blanch on their companies’ finances, manipulating stock with their golden parachute to bail them out at the end.

More significantly, despite new SEC disclosure rules, CEOs use illicit tactics to hide their true earnings from the shareholders. According to a Forbes.com article, three of the components of CEO compensation are salary, bonus, and long-term incentive plan payout, which are easy to find in the company proxy. But carefully hidden in the reams of data are the "final average compensation" which includes restricted stock awards. In other words, call it creative accounting which gives the outgoing CEO set-for-life wealth. Mitt Romney made his billions the old fashioned way–playing the CEO game, which financed his run for president.

Of course, these big-time crooks we call CEOs are masters of sinister machinations and deceit. Yet, companies, like pharmaceutical giant Pfizer, added executive pensions to their CEO’s perks at a time when the current corporate trend is to reduce or eliminate workers’ benefits like pensions and healthcare. Why? The fat-cat CEO is making all the money.

The bottom line: Big pay for the CEO is no guarantee of big payout for the shareholder. In fact, most CEOs could give a crap less what happens to the company. They’re foxes in the hen houses. They may or may not enhance the company stock, but by the nature of their compensation package, they are, by design, bleeding the company profits. Indeed, CEO salaries should be tied directly to performance. Yet, big company boards consider CEOs the rock stars of the corporate culture and throw money at them, guaranteeing them unreasonable compensation packages. In effect, they are saying, "Work for us, we’ll make you a billionaire."

Perhaps the so called Chief Executive Officer position should be eliminated in favor of democratic board voting power with two-thirds majority decision making. Let’s get rid of these creeps once and for all.