Corporate Compensation

[slacker]

Things that make me go GRRRRR.

 

 

WASHINGTON (Reuters) - Chief executives at U.S. companies that shipped jobs overseas won a 46 percent pay hike last year, more than five times the average CEO raise, while ordinary workers' paychecks barely budged, a study showed on Tuesday.

 

In its annual look at CEO compensation, the nonprofit liberal Institute for Policy Studies found executive pay at the 50 firms outsourcing the most service-sector jobs increased 46 percent in 2003, while the average CEO got a 9 percent raise and regular workers saw a 2 percent boost in pay.

 

"The fact that leading outsourcers make more money than average CEOs is one more reflection of a perverse system that rewards executives for making decisions that may improve their bottom line while hurting workers and communities," the Institute said in its 11th annual survey.

 

The study found the average compensation for chief executives at the top 50 outsourcing companies was $10.4 million last year, 28 percent above that of executives at 365 large companies surveyed by Business Week magazine, who earned about $8.1 million each.

 

CEO pay overall was 301 times higher than the $26,899 earned by the average production worker, the study showed. That's up from about 42 times that of the average worker in 1982.

 

The study's definition of compensation includes salary, bonuses, restricted stock, long-term incentive payouts, other annual compensation and the value of stock options exercised. It does not include the estimated value of options granted but not exercised.

 

The institute said it was not able to calculate the exact number of U.S. jobs affected by outsourcing last year because shipping jobs overseas has become such a sensitive political issue that firms try to avoid reporting such jobs losses.

The study focused on the 50 companies "on the forefront of the outsourcing trend" based on a database compiled by the Washington Alliance of Technology Workers, an affiliate of the Communications Workers of America labor group.

 

HOT POTATO

The top 50 outsourcing firms included United Technologies Corp., where CEO George David's pay rose 629 percent to $70.5 million last year; Citigroup, where outgoing CEO Sanford Weill's pay rose 305 percent to $54.1 million; and software giant Oracle, where CEO Lawrence Ellison's pay rose 103,974 percent to $40.6 million, according to the study.

 

Outsourcing has become a political hot potato in America, where job growth has lagged the economic recovery, and both President Bush and Democratic rival John Kerry have struggled to reassure workers there is a solution.

 

According to Forrester Research, more than 3 million service jobs will move offshore by 2015 -- many of them white-collar, high-tech or call-center jobs to India.

 

Some economists and policy-makers have said the shift will benefit the nation in the long run by lowering the price of goods and services and boosting profits, but U.S. workers argue they cannot afford to buy anything if they don't have jobs.

The study noted that if the U.S. minimum wage had increased as quickly as CEO pay has since 1990, it would be $15.76 an hour instead of the current $5.15.

 

The study noted the pay for CEOs who outsource was about 3,300 times the pay of an Indian call center employee or 1,300 times that of an average Indian computer programmer.