FOR IMMEDIATE RELEASE
CONTACT: United for a Fair Economy
Betsy Leondar-Wright, 617-423-2148 ext. 113
Labor Day Report:
CEO:Worker Pay Ratio Shoots Up To 431:1
Biggest Defense Contractors Raise CEOs' Pay 200 Percent Since 9/11
BOSTON - August 30 - 2004 was a banner year for CEOs and a dismal year for workers, according to a new report from the Institute for Policy Studies and United for a Fair Economy, "Executive Excess 2005: Defense Contractors Get More Bucks for the Bang."
The ratio of average CEO pay (now $11.8 million) to worker pay (now $27,460) spiked up from 301-to-1 in 2003 to 431-to-1 in 2004.
If the minimum wage had risen as fast as CEO pay since 1990, the lowest paid workers in the United States would be earning $23.03 an hour today, not $5.15 an hour.
The report found that CEOs are individually profiting from the Iraq War, with huge average raises at the biggest defense contractors.
At the 34 publicly traded U.S. corporations among the 2004 top 100 defense contractors with 10 percent or more of their revenues from defense contracts -- companies such as United Technologies, Textron, and General Dynamics -- average CEO pay increased 200 percent from 2001 to 2004, versus 7 percent for all CEOs.
For example, David H. Brooks, CEO of bulletproof vest maker DHB Industries, earned $70 million in 2004, 13,349 percent more than his 2001 compensation of $525,000. Brooks also sold company stock worth about $186 million last year, spooking investors who drove DHB's share price from more than $22 to as low as $6.50. In May 2005, the US Marines recalled more than 5,000 DHB armored vests after questions were raised about their effectiveness. By that time, Brooks had pocketed over $250 million in war windfalls.
Since September 11, the ratio between median pay for defense CEOs and pay for military generals has nearly doubled to 23-to-1, up from 12-to-1 just three years earlier. The pay ratio between defense CEOs and army privates soared to 160-to-1, up from just 89-to-1 in 2001.
The report reviewed trends in CEO pay and gave CEO Hall of Shame awards to executives who have exemplified five types of excessive pay:
Authored by Sarah Anderson, John Cavanagh, Scott Klinger, and Liz Stanton, Executive Excess 2005 is the twelfth annual CEO pay study by the Institute for Policy Studies (IPS) and United for a Fair Economy (UFE). The IPS is an independent center for progressive research and education in Washington, DC. UFE is a national organization based in Boston that spotlights growing economic inequality.
An embargoed PDF version of the report is now available to journalists on the web: http://www.faireconomy.org/CEO. For hard copies or to set up interviews with the co-authors, call 617-423- 2148 ext. 113 or e-mail firstname.lastname@example.org.