Jamie Dimon, JPMorgan’s chief executive, has been awarded total pay of $20 million for 2013, a 74-percent increase over the amount he received for 2012, according to a regulatory filing released on Friday.
The bank’s board of directors approved the increase even though a steady stream of scandals and a raft of regulatory actions have in recent months cast doubt on Mr. Dimon’s leadership at the nation’s largest bank. The big raise for 2013 came in the face of opposition from a vocal minority of board members, who wanted Mr. Dimon’s compensation for 2013 to be roughly equal to his pay for 2012, which totaled $11.5 million. . .
Mr. Dimon’s 2013 pay was close to the $23.1 million he got for 2011, when he was the highest-paid chief executive at a large bank. Over the last five years, Mr. Dimon has been paid nearly $70 million.
According to the New York Times,
Forty-two presidents of private colleges were paid more than a million dollars in 2011, up from 36 for the previous two years.
And as Jonah Newman reports, it’s the same justification we’ve heard about the escalating share of the surplus received by business CEOs, bankers, and others in the top 1 percent:
When defending compensation of $1-million and more for college presidents, trustees and university officials often repeat a simple refrain: Attracting the best talent costs money.
Well, the results are in and, to paraphrase Chico Escuela, the current recovery been berry, berry good to corporate CEOs in the United States.
According to GMI Ratings’ 2013 CEO Pay Survey, CEO compensation has set a new record: for the first time ever, the ten highest-paid chief executives in the United States all received more than $100 million in compensation and two of them took home billion-dollar paychecks.
The report also shows that the median increase in total realized compensation for S&P 500 CEOs was 19.65 percent (an increase even over last year, when they benefited from a 13.78-percent increase at the median).
While salary, bonuses, and perks remained relatively flat in the S&P 500, it was the profits made from the exercise of stock options and the vesting of restricted stock that represented the bulk of pay in the index. Examples include Michael D. White, third-year CEO of DIRECTV, who saw a realized compensation increase from $5.7 million in 2011 to $50.8 million in 2012. The increase occurred when Mr. White exercised more than one million stock options (worth $18 million) and saw more than a half million units of restricted stock vest (worth $26.8 million), all equity granted in a CEO Golden Hello. The company’s stock price has climbed about 80% over the past three years.
The average increase for the same group was 55.18 percent.
To make the appropriate comparison, consider the increase in hourly pay for workers (production and nonsupervisory) between December 2011 and December 2012. It amounted to 1.8 percent. The growing gap between those at the top and the rest meant that, in 2012, the CEO-to-worker-pay ratio in the United States rose to 354 to 1.*
Clearly, the current recovery has been very good for a tiny minority of executives, who are managing to leave everyone else behind.
*Again, for purposes of comparison, that ratio was 42:1 in 1982 and 281:1 just a decade ago. In terms of other countries, it was 89:1 in Sweden, 93:1 in Australia, and 147:1 in Germany in 2012.
Every hour, Larry Ellison, the CEO of Oracle, earns in total compensation the equivalent of the average annual salary of an American worker, according to CorpWatch.org.
More generally, according to the Economic Policy Institute, the CEO-to-worker compensation ratio in 2012 was 272.9-to-1, up from 20.1-to-1 in 1965, 29.0-to-1 in 1978, and 122.6-to-1 in 1995 (although down from the peak of 383.4-to-1 in 2000).
In other words, the average CEO’s daily salary is now greater than the annual salary of their workers.
As they say, only in America. . .
Workers in Bangladesh have managed to shut down more than 300 garment factories in protest over pay and working conditions after a building collapse killed more than 1,100 people.
The chart is based on a recent report by the Bureau of Labor Statistics, which reveals two key findings:
Workers are clearly paying the costs of recovery during the Second Great Depression.
*An additional 6.7 million people were displaced from jobs they had held for less than 3 years (referred to as short-tenured). Combining the short- and long-tenured groups, the number of displaced workers totaled 12.9 million from 2009 to 2011.
Where has all the surplus gone?
Well, in 2011, as for the past three decades, it’s gone to line the pockets of the Chief Executive Officers of the nation’s largest corporations.
With the filing of 2011 proxy statements, now we know a large chunk of the surplus went to CEOs. The median pay of the 200 top-paid CEOs of publicly trade companies in the United States was $14.5 million, according to a study conducted for the New York Times.
Here are the top 15:
The median pay raise for all 200 over was 5 percent.
Only 5 percent? That’s on top of the tens and, in some cases, hundreds of millions of dollars they were already bringing in. In the midst of the Second Great Depression, when the average income and wealth of the population is falling, and when unemployment remains obscenely high.
U.S. corporations are extracting more surplus from workers in the United States and around the world. And a large chunk of that surplus is showing up in the compensation paid to corporate executives. So, pay for performance and shareholder-imposed limits don’t solve the problem because the CEOs are being paid to create the conditions for getting more surplus out of their workers.
And then they get to share in the booty. That’s where the surplus has gone.
Where has all the surplus gone? As in 2010, a good chunk of it has gone to pay Chief Executive Officers of major U.S. companies.
According to a new Associated Press study, the head of a typical public company in United States made $9.6 million in 2011. This figure was up more than 6 percent from the previous year, is the second year in a row of increases, and is the highest since the AP began tracking executive compensation in 2006.
According to my calculations, using Bureau of Labor Statistics data, the typical CEO therefore made 254 times the typical U.S. worker (whose annual pay in 2011 was $37,813).
Here’s the list of the 20 highest-paid CEOs:
The Wall Street Journal makes much of the fact that “chief executives increasingly are being paid based on their companies’ financial results and share prices.”* But that’s not a solution. It’s the problem. U.S. corporations are managing to extract more surplus from their workers precisely because workers’ wages failed once again to grow in any significant manner during 2011. And CEOs are getting a large cut of the increased surplus they managed to supervise.
So, let me amend my question: where have all the surpluses come from? Workers have created them every one.
*But see if you can find any kind of correlation here: