It is a known fact that Wall Street executive have seen increases in their earnings at a rate far greater than that of the average American worker. It is also a known fact that wages for the vast majority of American workers are stagnant, if not contracting, while CEOs and other top executives take home larger and larger payouts. Now Wall Street’s brass, as compliments to their already oversized compensation packages, are doing better even in the pension category. According to the WSJ, pensions for Wall Street’s top executive rose by an average of 19% last year. Over 200 officers saw their retirement savings jump over 50%, even as their companies stock price dropped by an average of 37% (apparently, the ability to lose money is nowadays considered a talent).
The spike in pensions, the Journal said, citing an analysis of filings from 340 Standard & Poor’s 500 companies, was due in part to generous formulas and arcane techniques such as changes in age or interest rates used in calculations that trigger the increases.
The journal cited as an example Altria Group’s (MO) CEO Michael E. Szymanczyk whose pension rose when he turned 60 last year, triggering a subsidy built into the pension formula, boosting its total value to $23.5 million.
Pharmaceutical company Merck & Co. (MRK) CEO Richard Clark, saw the value of his pension spike almost 100% from $11.9 million to $21.7 million, thanks in part to a $6 Million rise in the portion of his compensation used to calculate his pension. Certain incentive payments for ConocoPhillips (COP) CEO Jim Mulva boosted his pension by $9.5 million to reach $68.2 million, the paper said.
The top executives at General Electric (GE) and Exxon Mobil (XOM) saw the amounts they were due from pensions rise by 13% to $140.7 million ; 18% to $108 million, respectively. PG&E Corp. (PCG) awarded CEO Peter Darbee an additional five years of service in 2008, which helped boost his pension to $5.2 million from $3.8 million, a 38% rise. Constellation Energy Group’s CEO Mayo Shattuck saw his pension grow by 45% — 10.3 million dollars, according to company filings.
These execs, on average, take home nearly a thousand times as much as a person working for minimum wage. With this extraordinary and undeserved ratio, an average exec/CEO makes more before lunch on his first day of work than a minimum-wage earner will make all year. The illusion that executives do anything comparable to the rewards they receive, is just that, an illusion.
Graph: WSJ
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