Report Scores Runaway CEO Pay, Alleges War Profiteering
WASHINGTON – Chief executives at U.S. defense contractors have seen a 200-percent pay raise since the Sep. 11, 2001 terrorist attacks, widening the chasm between compensation in the corner office and wages on the factory floor, a new report said Tuesday.
Average CEO pay–$11.8 million in salary, stock options, bonuses, and incentives–rose last year to 431 times what the average worker earned, $27,460, according to the report from the Washington, D.C.-based Institute for Policy Studies and Boston-based United for a Fair Economy. In 2003, CEOs had made 301 times their average employees’ pay.
The ratio had peaked at 525-to-1 in 2001.
”If the minimum wage had risen as fast as CEO pay since 1990, the lowest paid workers in the U.S. would be earning $23.03 an hour today, not $5.15 an hour,” the research and advocacy groups said.
The report charged that individual CEOs have profited from the Iraq War, with huge average raises at the biggest defense contractors. To arrive at this conclusion, it looked at 34 of the top 100 defense contractors of 2004. While most firms in the larger group were privately held, the 34 included in the report were publicly traded, meaning that their financial results were easier to research.
The 34 companies covered by the report–firms including United Technologies, Textron, and General Dynamics–made at least 10 percent of their revenues from defense contracts.
At these firms, average CEO pay rose 200 percent from 2001 to 2004–as compared to seven percent for all CEOs.
Examples cited in the report include that of David Brooks, CEO of bulletproof vest maker DHB Industries, who earned $70 million in 2004, up 3,349 percent from his 2001 compensation of $525,000.
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