April 21, 2011
It’s [still] good to be the king…
The national AFL-CIO has released its 2011 report on executive compensation, and PayWatch 2011 is sure to make advocates for workers’ blood boil:
2010 was another good year to make lots of money—if you were a CEO. CEOs of the largest companies received, on average, $11.4 million in total compensation last year, according to the AFL-CIO analysis of 299 companies in the S&P 500 Index. Overall, CEOs of the 299 companies in the AFL-CIO Executive PayWatch database received a combined total of $3.4 billion in pay in 2010, enough to support 102,325 jobs paying the median wages for all workers.
The Wall Street executives who helped create the financial crisis and economic recession also did well. While cash bonuses fell, total compensation for Wall Street firms increased in 2010. The Wall Street Journal estimates that total compensation at large financial services companies rose 5.7 percent to a record $149 billion in 2010.
Are these CEOs being paid to expand their companies, grow the real economy and create good-paying jobs? Apparently not. According to the Federal Reserve, U.S. corporations held a record $1.93 trillion in cash on their balance sheets. A lack of business investment is one reason that more than 14 million Americans remain unemployed.
Case study of Reynolds American CEO Susan Ivey
Until she retired in February 2011 at the old age of 52, Susan Ivey was President and CEO of Reynolds American, the Winston-Salem, NC based cigarette maker, by the way, which has refused for over three years to meet with representatives of tobacco farmworkers who toil to produce and harvest the golden leaf that has made her so wealthy.
Ivey’s total compensation in 2010 amounted to $23,813,815. But even that 8-figure payout does not include the enormous sum of money Susan Ivey received for quitting her day job:
Ivey, who retired at age 52 in February 2011, is one of the few lucky Americans who can retire early. On her retirement, she was entitled to receive $17.1 million in restricted stock and performance shares. She also is entitled to $454,273 in health care benefits in her retirement. Ivey is fortunate to receive these health care benefits—new employees hired after 2004 are not entitled to retirement health benefits.
Ivey also has accrued a present value of $10.6 million in pension benefits through various plans of the company. In addition, she retained $7.9 million in benefits under a supplemental pension plan for executives of Brown & Williamson Tobacco, a company that merged into Reynolds American in 2004. Reynolds American closed its defined-benefit pension plans for new employees starting after 2004.
Under this supplemental plan for Brown & Williamson executives, Ivey received an additional five years of service credit that increased the present value of her retirement benefits by $2.8 million. Her early retirement benefit is equal to 91.5 percent of her full retirement benefit commencing at age 52. Ivey will receive her supplemental pension benefits as a lump sum. Meanwhile, the company’s pension plans had a $595 million shortfall at the end of 2010.
Read more at http://www.paywatch.org/.