Executive Excess 2013: Bailed Out, Booted, and Busted
Executive Excess has reported annually on excessive CEO compensation since 1994.
This 20th anniversary Executive Excess report examines the "performance" of the 500 corporate chief executives who have ranked among America's 25 highest-paid CEOs in one or more of the past 20 years.
The report’s key finding: Nearly 40 percent of the CEOs on these highest-paid lists eventually ended up “bailed out, booted, or busted.”
· The Bailed Out: CEOs whose firms either ceased to exist or received taxpayer bailouts after the 2008 financial crash held 22 percent of the slots in our sample. Richard Fuld of Lehman Brothers enjoyed one of Corporate America’s largest 25 paychecks for eight consecutive years — until his firm went belly up in 2008.
· The Booted: Not counting those on the bailed out list, another 8 percent of our sample was made up of CEOs who wound up losing their jobs involuntarily. Despite their poor performance, the “booted” CEOs jumped out of the escape hatch with golden parachutes valued at $48 million on average.
· The Busted: CEOs who led corporations that wound up paying significant fraud-related fines or settlements comprised an additional 8 percent of the sample. One CEO had to pay a penalty out of his own pocket for stock option back-dating. The other companies shelled out payments that totaled over $100 million per firm.
“This report should put an end to any remaining sense that we have ‘pay for performance’ in Corporate America,” notes Sarah Anderson, a co-author of all 20 IPS annual Executive Excess reports. “Without strong action from regulators, lawmakers, and shareholders, this broken CEO pay system will continue to undermine our economy.”
The two-minute video above uses animation to dramatize the abysmally bad performance of executives at the upper-most echelon of Corporate America. The report also includes three infographics illustrating how our executive reward system encourages CEOs to act recklessly -– at worker, consumer and taxpayer expense.
This year's Executive Excess includes an updated scorecard that rates recent pay reforms now in place, as well as other reforms pending in Congress and a few promising initiatives not yet on the congressional table. The Scorecard offers a special status report on the executive pay-related provisions in the Dodd-Frank financial reform legislation, noting that regulators have delayed most of the new rules in the face of intense corporate resistance.
More Key Executive Excess 2013 Findings:
Our analysis of America’s most highly paid CEOs over the past two decades finds that in addition to the “poor performers club,” top-paid CEOs also belong to an assortment of other eyebrow-raising clubs.
The Men’s Club: Only four women have made the top 25 lists over the past 20 years. Adding to the group’s clubbiness: Two sets of brothers and one set of male cousins populate our two-decade sample of America’s highest-paid CEOs.
The $1 Billion Club: Three CEOs stood out by raking in more than $1 billion in inflation-adjusted pay over the course of the past 20 years. Lawrence Ellison of Oracle tops the overall pay list, with $1.8 billion. Sanford Weill of Travelers and Citigroup pocketed $1.5 billion, and Michael Eisner of Disney grabbed $1.4 billion.
The Taxpayer Trough Club: CEOs whose companies rank among the nation’s top 100 recipients of federal government contracts comprise more than 12 percent of the top-paid chief executives on our 20 annual lists. In the same years that their CEOs pocketed some of corporate America’s fattest paychecks, these firms snagged $255 billion in taxpayer-funded federal contracts.