CEO money grab

Much has been written about income disparity and the concentration of wealth in the U.S.  I happen to believe that this phenomenon is a a major contributor to the unstable Goldilocks economy we’re living in.  Congress has been looking into this problem and has released its first report.  Ever wonder how a CEO of a company that’s losing money ends up getting huge raises?  The Congressional report shows that executives are paying consultants millions of dollars to issue opinions to the corporations’ boards — and the “compensation consultants” tell the board to increase the CEO’s compensation.  This report is thus far the only place you can see this data:  “The information provided to the Committee represents the best — and only —comprehensive information currently available on the extent of conflicts of interest among executive compensation consultants. An analysis of this information shows that in 2006, over 100 Fortune 250 companies used compensation consultants that provided both executive compensation advice and other services to the company at the same. In many cases, the consultants hired to provide executive compensation advice were paid millions of dollars by the executives whose pay they were supposed to assess.”  Read the entire report here → ceocompensationushouse.pdf

Look at this chart showing the latest retail CEO compensation compared to underlying corporate performance — look at the 100% or more pay raises compared to the lousy underlying results – very interesting (from the National Retail Federation) → ceopay08update.pdf

And Robert Reich’s summary of why the American middle class cannot continue to cope →  http://www.ft.com/cms/s/0/5deb45aa-ce7e-11dc-877a-000077b07658.html

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