Why top executive pay continues to fall
TEXT OF INTERVIEW
Bill Radke: Another new survey out this morning finds executive paychecks at the 200 biggest U.S. companies fell about 1 percent in 2009, and that’s on top of a 3.5 percent drop in 2008. Marketplace’s Mitchell Hartman joins us live with that. Good morning, Mitchell.
Mitchell Hartman: Good morning, Bill.
Radke: So this executive hit, is this the recession effect?
Hartman: It seems to be the case, based on this analysis done for the Wall Street Journal. It’s of salary bonus and stock options. This is the second year executive pay went down. Before that, it hadn’t fallen for 20 years. Andrew Hilton of the CSFI think tank in London, though, told me he thinks the long-term trend is still up because of the ego competition between top CEOs:
Andrew Hilton: And the myth of the CEO as superman means that, you know, nobody can be average, everybody has to have a corporate jet, everybody has to have a better golden parachute than the next guy.
Hilton says some of the worst abuses are being addressed by regulators and corporate boards, though, like having top executives serve on each other’s compensation committees.
Radke: So give me some names, Mitchell — whose wages fell or rose?
Hartman: The top earner was Occidental Petroleum’s Ray Irani, he got $52 million.
Next, Disney’s Robert Iger at $21 million. And at the bottom, Dish Networks CEO Charles Ergen, whose pay fell more than 90 percent to just $623,000.
Radke: Mmmm, scandalous. Mitchell, can we assume that everyone connected to Wall Street did worse last year?
Hartman: No, not at all. Move down the street to hedge fund headquarters, it’s an entirely different story. The magazine Absolute Return just ranked managers. The top 25 earners made $25 billion all told.
Radke: Marketplace’s Mitchell Hartman. Mitchell, thank you.
Hartman: You’re welcome.
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