Executive payment increasing as income flat line

CEO pay in corporate America rose 12 percent past year to a median of $9.6 million. Corporate profits were up nearly 30 percent in the fourth quarter, the fastest growth in more than 60 years. As CEOs padded their paychecks, middle class workers have had to make do with less as rising cost of living cuts into wages.

CEO pay rises at the expense of United States workers

The pay of CEOs has increased during the recession, while the normal hard working American’s has declined. Even as employment is increasing, employee pay isn’t, but CEO pay is. The pocket book of CEO’s is growing daily as stock prices rise, rather than hiring more of the 13 million individuals out of work. CEO’s have no reason to hire employees when they’re making do with who they have. Economic bailout sectors were given to CEO’s in 2010 at an average of 12 percent. Yet, private sector pay rose by about 2 percent. 8.8 percent was the average unemployment rate in March. Most economists predict the jobless rate will continue to remain high for years.

CEO stock opportunities on the rise

The highest paid CEO in the U.S. last year was Phillipe Dauman of Viacom who pocketed $84.5 million in just nine months. Ray Irani of Occidental Petroleum made $76.1 million past year, making him take the place of the second highest paid CEO. Forbes also states that Oracle’s Larry Ellison brought in $39.5 million making him the third highest paid. CEOs are gaining the largest raises since 2007, with stock choice thanks to Wall Street. Knowing that someday the market had to recover, CEOs took stock options when they had little value. The stock market has recovered and now the CEOs are cashing in and making the big bucks. USA Today reports that many of the CEOs cashing in their stock choices were making well over $20 million.

The increase in commodity prices hurts the middle class

Middle-class America is having a difficult time with these payments to CEOs since they have had trouble with pay increases. The Bureau of Labor Statistics states the average hourly wage for workers has not increased by a penny in so-much-as five months. While United States workers who still have jobs aren’t getting raises, employers in creating nations are hiring new consumers who are pushing up demand and prices for food, oil, cotton and other commodities. Costs of commodities and wages are essentially going in opposite directions. Any increases that workers have received go right into their gas tanks. The average U.S. commuter buys 12 gallons of gas a week. People have reported that filling a gas tank is costing $40 more per month than it did past year. Yet the average weekly raise only increased by about $18.

Articles cited

New York Times

nytimes.com/2011/04/10/business/10comp.html?_r=2#38;ref=business

USA Today

usatoday.com/money/companies/management/2011-04-04-1Aoptions04_ST_N.htm

NPR

npr.org/2011/04/10/135272006/paychecks-cant-keep-up-with-rising-prices