Economic slowdown didn't affect CEOs' pay
Top executive pay for 365 of the nation's largest companies averaged $13.1 million
Diane Stafford - Knight Ridder
Despite layoffs, stock slumps and economic slowdowns, top executives were rewarded handsomely in 2000, according to a CEO pay study to be released today.
At 52 companies that announced layoffs of more than 1,000 workers, the CEOs received average salary and bonus increases of nearly 20 percent, according to the eighth-annual CEO pay study by the Institute for Policy Studies and United for a Fair Economy.
The institute, which identifies itself as a "progressive research and education" organization, and the Fair Economy group, which is dedicated to spotlighting wage inequality, said the "layoff leaders" earned an average of $23.7 million in total compensation in 2000.
The authors of "Executive Excess 2001" said the average compensation for CEOs at 365 of the nation's top companies was $13.1 million.
The 2000 survey found a marked change in the form of CEO compensation.
Throughout the economic boom of the 1990s, executive pay was weighted heavily toward stock options. When the market slumped in 2000, cash payments to CEOs "spiked 18 percent," the report said.
"This trend was not mirrored for U.S. workers as a whole, however. According to the (U.S. Department of Labor), average wage earners received a pay hike of only 3 percent in 2000, and salaried employees got about 4 percent (in average raises)."
The report cited the crash of many Internet businesses, the U.S. manufacturing slump and the plethora of mergers and acquisitions as reasons for last year's layoff spurts. But, the authors argued, history shows that downsizings frequently failed to improve financial performance after the year in which the layoffs occurred.
As in previous years, the CEO pay report also focused on the widening wage gap between CEOs and all other workers, the gender gap in pay, the growth of "living wage" ordinance campaigns and efforts to increase the federally mandated minimum wage, which currently is $5.15 an hour.
And, as in previous reports, the authors noted the disparity between CEO pay increases and those of the lowest-income workers: If the minimum wage had grown since 1990 at the same rate as CEO pay, it would now be $25.50 an hour.