3.2.2003
<Note from JobFairy.com: This article ends by citing how the "study shows that the compensation level for CIOs is back to 1998 levels because of the lack of bonuses". I'm totally not buying this. We're being taken for a ride, told that we have to wait to get raises until the economy improves. Well, it looks like certain peoples' economies are doing just fine, thank you very much! And as for the stock options part in the executive compensation study; that's interesting - I got options where I work, but mine don't vest for years. Theirs seemed to have vested right away. Gee, I guess timing is everything, isn't it? How come their options are better than mine? Maybe all that testosterone makes options vest upon grant. :P >
"All animals are equal, but some are more equal than others." - Orwell in Animal Farm
"The crux of the matter is whether the corporations are playing by one set of rules -- rules that they themselves set -- and the rest of us are playing by rules that we've determined for dealing with each other and not necessarily for non-human entities. The corporations encourage that, of course, because the asymmetry benefits them." -- Carlton Vogt
"Executive Salaries Increased 5.9% Last Year, According to Economic Research Institute/CareerJournal.com Index
In 2002 the highest paid executives in America received an 5.9% increase in total cash compensation, according to the Executive Compensation Index figures released today by ERI Economic Research Institute and CareerJournal.com, The Wall Street Journal’s executive career site.
The study also found that executive compensation continued to grow faster than annual company revenues, which rose a meager 0.89% in 2002. This measurement can be used to determine an executive’s value to stockholders.
Changing the way executive compensation is shown on proxies may have had an impact on the latest Executive Compensation Index figures. How much an executive earns depends largely on how stock options are valued, the most essential part of their compensation. Although accounting standards do not require companies to expense stock options in the year they are granted, some companies have voluntarily done so, presumably in response to the change in the atmosphere of "corporate accountability." According to 2002 proxies, some companies have included stock options into annual bonus figures, rather than breaking them out separately as they have done in the past. "Stock options give executives remarkable leverage," says Tony Lee, editor in chief of CareerJournal.com. "When shares swing upward, executive rewards can outdistance those of investors. Salaries and bonuses, combined with options, have changed the face of executive compensation." The Executive Compensation Index tracks the total cash compensation (salary + bonus) for the highest-paid executives at a cross section of 45 major U.S. businesses. The index (1997 = 100) stood at 168.9 for February 2002, compared with 178.9 for February 2003, an increase of 5.9%. Notes ERI Director Dr. David Thomsen: "The nearly 6% growth in executive pay during 2002 is much higher than the increase of 2.7% in middle-management cash compensation for 2002 and the rise of only 1.1% in rank-and-file compensation that we see reported in our 2003/2004 Salary Planning Survey." The Index results are compiled by ERI/CareerJournal.com each quarter and capture total cash compensation reported in the previous 12-month survey period. The entire Economic Research Institute (ERI)/CareerJournal.com Executive Cash Compensation Index and Report can be found on ERI’s site at www.eri-executive-compensation.com."
<Note from JobFairy.com: [Bolding and italics in the above article mine.] This is going on, in a period of massive layoffs and record corporate profits... If the economy is doing so badly, where are they getting the money for all of this? Oh, wait, I know. It's coming out of OUR POCKETBOOKS!!!>
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