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While many companies doled out seven-figure raises for their top brass last year, they were far more stingy with the rest of their employees — as they have been for decades now.
A report released this week by executive compensation and corporate governance data firm Equilar finds that 44 of the 50 top-paid CEOs were paid more in 2013 than 2012 — these 50 CEOs saw a 21.7% increase in median pay — and two of them got raises in excess of 400%, and in one case in excess of 500% (pay includes salary, stock, options awards, cash bonuses, perks and other incentives).
And some CEOs did especially well last year: the highest-paid CEO, Anthony Petello, of Nabors Industries, raked in $68.2 million, up 246% from 2012; the second highest-paid CEO, Leslie Moonves of CBS, got $65.6 million, up 9%; and the third-highest-paid, Richard Adkerson of Freeport-McMoRan Copper & Gold, got $55.3 million, up 294%. The CEO with the biggest pay jump was number-four-ranked Stephen Kaufer of TripAdvisor, whose pay jumped 510% to $39 million, followed by Sandeep Mathrani of General Growth Properties, whose pay of $22.1 million was up 424%.
“The biggest driver for change in pay for 2013 vs. 2012 was the stock award, the equity given to the execs,” says Aaron Boyd, the director of governance research at Equilar — which, because the stock market had such a good year, boosted their pay significantly.
What’s more, 2013 isn’t a fluke: CEOs have been quietly (and some not so quietly) ratcheting up higher and higher paychecks throughout the past few decades. From 1978 to 2012, CEO compensation rose 875% — a rise that was “substantially greater than the painfully slow 5.4% growth in a typical workers’ compensation over the same period,” according to a study released last year by the Economic Policy Institute .
Furthermore, the CEO-to-worker compensation ratio was 29.0-to-1 in 1978, compared with a whopping 272.9-to-1 in 2012, and CEOs now earn 202.3 times more than than the typical worker, compared with 26.5 times in 1978.
CEOs are even raking in loot at a far faster rate than very highly compensated professionals (those earning more than 99.9% of other wage earners). In the ‘50s, ‘60s and ‘70s, CEOs made 1.62 times more than ultra-high earners, but in 2010 that ratio was 3.08 times more.
Meanwhile, the 99% is struggling — and has been for decades, according to several studies. A report by the Census Bureau found that the real median income of Americans — $51,017 — is virtually unchanged from the late 1970s and early 1980s. And a study by the Economic Policy Institute released last year found that the median worker has seen wage growth of about 5% between 1979 and 2012, even as productivity grew 74.5% over that period.
“The wage and benefit growth of the vast majority, including white-collar and blue-collar workers and those with and without a college degree, has stagnated, as the fruits of overall growth have accrued disproportionately to the richest households,” the study authors conclude.
Even workers who do get raises typically don’t see anywhere near the massive pay hikes that some CEOs get. Workers who were among the highest-rated employees in a company got raises of an average of 4.3% in 2013, an increase of just 0.2% from a year earlier, according to the seventh annual Compensation Planning Survey by Buck Consultants. And according to a survey by Towers Watson, the highest performers got an average salary bump of 4.6% in 2013, compared with 2.6% for average employees.
And employees shouldn’t expect their employers to make it rain anytime soon: According to Towers Watson, employers are planning on doling out average raises of just 2.9% for salaried, non-management employees — virtually unchanged from last year. “With the job market remaining relatively soft, most companies aren’t feeling pressure to raise salaries by much more than the rate of inflation,” said Laura Sejen, global practice leader for rewards at Towers Watson .
Top-paid CEOs get 400% raises ? you?ll get 2.9% - MarketWatch
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