This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Fumigation for Overpaid CEOs - Weiss

An Institute of Policy Studies survey found that in 2009, median CEO pay was 263 times the pay of the average worker. In the1970s the ratio was 30 to 1. I guess that's what they call "corporate governance reform." The institute found that the 50 CEOs who laid off the most people over the past two years paid themselves (while weeping, no doubt) an average of $12 million a year.

The 2009 crop of overpaid corporate lichen cited in the report includes Fred Hassan, ex-CEO of Schering-Plough (SGP), who threw 16,000 people out of work after it merged with Merck (MRK - Get Report) last year. He received a golden parachute of more than $49.6 million, making him the richest job-slasher of the bunch. Right up there is Ivan Seidenberg, CEO of Verizon, (VZ) who raked in $17.5 million at the same time that his telecom was laying off thousands. Coming close behind Ivan 's treasure chest is Dan Hesse, CEO of Sprint Nextel (S), who poured $12.3 million into his bank account at the same time that he mailed over 10,000 pink slips.

Now, keep in mind when the boss-to-prole ratio numbers come out that CEOs are always paid fairly, even when their paychecks seem insane. A Sprint-Nextel spokesperson pointed out to the Kansas City Star that "every Sprint employee's compensation, including the majority of Dan Hesse's, is tied to company performance." I suspect that this fair-pay system is already in place for one of my favorite CEOs, Overstock.com's (OSTK - Get Report) Facebook-pretexting Patrick Byrne. He doesn't draw a salary --and judging from the recent earnings disappointment and stock-price slaughter, he is still paid too much. In the plutonomy, you see, no matter what the salary, competence is always optional. What we really need is a brains-to-bucks ratio.

Gary Weiss has covered Wall Street wrongdoing for almost a quarter century. His coverage of stock fraud at BusinessWeek won many awards, and included a cover story, "The Mob on Wall Street," which exposed mob infiltration of brokerages. He uncovered the Salomon Brothers bond-trading scandal, and wrote extensively on the dangers posed by hedge funds, Internet fraud and out-of-control leverage. He was a contributing editor at Conde Nast Porfolio, writing about the people most intimately involved in the financial crisis, from Timothy Geithner to Bernard Madoff. His book "Born to Steal" (Warner Books: 2003), described the Mafia's takeover of brokerage houses in the 1990s. "Wall Street Versus America" (Portfolio: 2006) was an account of investor rip-offs. He blogs at garyweiss.blogspot.com.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
MRK $60.65 1.30%
OSTK $20.90 -2.10%
S $5.15 -1.30%
AAPL $128.73 -0.17%
FB $78.81 -0.23%

Markets

DOW 18,070.40 +46.34 0.26%
S&P 500 2,114.49 +6.20 0.29%
NASDAQ 5,016.9290 +11.5380 0.23%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs