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Hail to the CEOs
Introduction
As these lines are written we have been through the deepest
recession in America’s history since the 1930s for a year. Triggered
by the failure of sub-prime mortgage loans, the present crisis is
generally blamed on the insatiateness of American consumers, a poor
savings rate, the prevalence of greed over morality among top
managers and the excesses of financial engineers, whose creative use
of uncontrolled derivatives amplified the risks, instead of
mitigating them.
The evolution of the American financial sector during the last 25
years and the creation of huge personal accumulations by investment
bankers, fund managers and corporate raiders, will be treated in an
extra chapter (19) to come. But the role of the greedy top
executives of America’s largest corporations and their princely
remunerations is subject of this one.
Indeed, the stellar rise of top executive compensation and notably
the regal treatments of the CEOs, is a most controversial subject in
light of the worldwide economic crisis and the apparent decay of
corporate morality we are witnessing now.
As detailed in our thematic list, 140 CEOs of American
corporations of the present or recent past have accumulated fortunes
of $100 million or more, sometimes much more. (Table 1 : Billionaire
CEOs).
Thanks to extraordinarily generous stock option schemes and soaring
stock prices, quite a number of US CEOs have seen their personal
incomes reach $100 million or more in peak years, a level which puts
them on equal footing with America’s wealthiest capitalists. (Table
2 : Centimillionaire income CEOs)
In some cases, centimillion (or otherwise excessive) incomes eludes
CEOs until they leave the company, usually after a number of
disappointing years for the shareholders and frequently as a result
of a merger. Thanks to golden parachutes and deferred compensation
schemes, such “fired” CEOs often walk away with end of service and
severance packages of $100 million and more. In one controversial
case, end-of-service compensation even exceeded one billion dollars.
(Table 3 : CEOs with centimillion severance packages).
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Hail to the CEOs
> Index
and Introduction
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