On August 18, 2015, Andrew Khouri writes in the Los Angeles Times:
Raises have remained elusive for American workers, but one elite slice of the workforce is seeing steady growth: the CEO.
Chief executives of major corporations saw their median pay jump 5% last year to nearly $10.3 million, a pickup from the 4% gain recorded in 2013, according to a report released Monday from benefits consulting firm Mercer.
The bump comes as executive pay faces increased scrutiny. This month, the Securities and Exchange Commission voted to require public companies to disclose the pay difference between their chief executive and the average worker, a gap that’s sure to be shocking to many.
A recent study from the Economic Policy Institute, a left-leaning think tank, showed that chief executives of large public companies saw their pay soar in recent decades.
That study said average CEO compensation was $16.3 million in 2
Mercer said that the focus on CEO pay has caused firms to limit increases to fixed compensation. Base CEO salaries were little changed in 2014, while “long-term incentives are fueling overall pay increases,” Ted Jarvis, the company’s global director of executive compensation, said in a statement.
In its study, Mercer analyzed compensation totals for chief executives at 174 companies in the S&P 500. Pay tied to long-term incentives rose 6%, while short-term incentive pay climbed 4%.
Comparatively, American workers saw their wages grow 2.1% for the year ended July 31, according to Labor Department data.
http://www.latimes.com/business/la-fi-ceo-pay-20150817-story.html
Such articles as that written by Andrew Khouri fail to accurately distinguish the compensation of CEOs and other corporation employees. Khouri lumps all CEO income as compensation while attributing other employee income as wages. The reality is that CEO compensation is represented by two sources: salary (wages) and equity award grants (OWNERSHIP shares representing the capital asset worth of the corporation), which are awarded to upper management employees, such as CEOs, by the compensation committee of the corporation’s board of directors. The equity share grants represent the bulk of the CEOs compensation, not wages, are awarded to attract qualified CEO and award profitable performance.
Our scientists, engineers, and executive managers who are not owners themselves, except for those in the highest employed positions (such as CEOs), are encouraged to work to destroy employment by making the capital owner, who contributes the portion of the capital assets he or she OWNS, more productive. How much employment can be destroyed by substituting “machines” (non-human means of production) for people is a measure of their success––always focused on producing at the lowest cost. Only the people who already own productive capital are the beneficiaries of their work, as they systematically concentrate more and more capital ownership in their stationary 1 percent ranks. Yet the 1 percent are not the people who do the overwhelming consuming. The result is the consumer populous is not able to earn the money to buy the products and services produced as a result of substituting “machines” for people. And yet you can’t have mass production without mass human consumption made possible by “customers with money.” It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.
