BOSTON - April 14 - After declining for the last two years, the gap in pay between average workers and large company CEOs surpassed 300-to-1 in 2003. In 2002, the ratio stood at 282-to-1. In 1982, it was just 42-to-1.|
According to Business Week's 54th Annual Executive Compensation Survey, published this week, the average large company CEO received compensation totaling $8.1 million in 2003, up 9.1% from the previous year. Business Week's survey covers the 365 largest companies that have reported their executive pay to date.
From 1990 to 2003:
CEO pay rose 313%
The S&P 500 rose 242%
Corporate profits rose 128%
Average worker pay rose 49%
Inflation rose 41%
The average production worker fared less well in 2003. Their annual pay was $26,899 in 2003, up just 2.1% from 2002 according to the Bureau of Labor Statistics. The average worker took home $517 in their weekly paycheck in 2003; the average large company CEO took home $155,769 in their weekly pay.
If the minimum wage had increased as quickly as CEO pay since 1990, it would today be $15.71 per hour, more than three times the current minimum wage of $5.15 an hour.
"While workers are increasingly anxious about their job security, and how they will pay the rising costs of everything from health insurance to housing, from college to gasoline, corporate executives continue to distance themselves from the cares and worries of those they lead. It sends a poor message to demand cost cutting from the factory floor, while costs in the executive suite are left to soar,"said Scott Klinger, spokesperson for United for a Fair Economy, an independent national non-profit that raises awareness of growing economic inequality.
"Boards remain far too clubby in the post-Enron world. We need some new board members who can say 'no' to executive pay packages that widen the chasm among those who collectively create shareholder value,"said Klinger.