EXECUTIVES of the Standard & Poor’s 500 companies that filed proxy information in the first half of this year received a combined $4.16 billion in 2006, according to the Associated Press.
In a lengthy article that is part of a special report on executive pay hitting mainstream newspapers across America over the weekend and this morning, AP business writer Ellen Simon reports that half of the executives earned more than $8.3 million.
The highest earner was Yahoo! Inc.’s Terry Semel, who took home $71.7 million even as his company’s stock price languished.
I’m quoted in the article talking about the fact that it’s not just the lack of plain English in pay disclosures that is a problem, but the fact that there’s a huge disconnect between the methods used to pay executives and the experience that the rest of the workforce has with how they themselves are paid.
CEOs and other executives are compensated via such a complex variety of schemes that it takes page after page in proxy statements to explain them. All the while, the reader is thinking about their own pay check and they’re wondering why theirs is so simple to understand and the CEO’s is so convoluted.
This breeds deep distrust. People can easily imagine gray-suited men in smoke-filled rooms sipping Scotch and dreaming up all manner of deceptions to siphon off billions to themselves without anyone ever really being able to decipher what it is happening.
Needless to say, executive pay is bad for the image of CEOs and for big American corporations. It’s also the major reason for the persistent low levels of public trust in them.
Hundreds of CEOs top $8.3M pay mark (USA Today)
Jets, golf, yachts, beer: CEOs rake in extras (USA Today)