US executive pay packets go up even as economy slumps

April 15th, 2009 - 9:49 am ICT by IANS  

By Arun Kumar
Washington, April 15 (IANS) Even as the American economy went into a tailspin, the median salary of chief executives of 200 large US corporations increased by 4.5 percent to $1.08 million last year, according to a new survey.

On top of that, these corporations keep plying executives with generous freebies, despite the public outcry over private jets and other executive perks, said the survey released Tuesday by AFL-CIO, the country’s largest labour federation.

The executive pay study of major companies by the AFL-CIO, calculated compensation that included stock options granted to CEOs but not yet vested.

Using that methodology, Citigroup Inc’s Indian American CEO Vikram Pandit made $38 million in 2008, compared with the roughly $11 million reported in the company’s compensation section in US Securities and Exchange Commission filings.

Citigroup collected $45 billion under the federal government’s Troubled Asset Relief Programme (TARP) in 2008.

The 2009 AFL-CIO Executive PayWatch site said the perks for executives rose on average by 12.5 percent in 2008 to $336,248-or nine times the median salary of a full-time worker.

Even more appalling is the practice of rewarding executives who drive their companies into the ground, it said noting that in 2007 - the year the financial crisis began to unfold - the top 10 recipients of TARP collectively paid their CEOs a combined $242 million in total annual compensation.

That averages nearly $25 million per CEO to run companies that might have gone bankrupt if not for billions of dollars in taxpayer assistance.

This year’s Executive PayWatch highlights 10 case studies that show the multiple ways CEOs profited big time, while the average worker could barely hang on.

For example the top US insurance company AIG, which has been kept afloat by more than $170 billion in federal assistance-about $1,500 for every household in the US-and still paid out more than $500 million in salaries and bonuses to hundreds of senior employees, it said.

Wall Street pay has been heavily scrutinised in the past year, especially for executives at major financial firms getting funds under TARP, aimed at keeping troubled banks afloat and keeping the banking system sound.

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