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The Rich Get Richer: Top CEO Pay Up While Stocks Tumble

Posted Aug 19, 2009 09:55am EDT by Tech Ticker in Investing, Newsmakers, Products and Trends, Recession

With news that new AIG CEO Robert Benmosche will pocket a $7 million pay package, investors and Main Street alike can't help asking -- so what's changed?

Not much, according to our guest Michelle Leder, founder and editor of Footnoted.org, a site that makes it their business to parce through SEC filings for juicy tidbits. As the recent release of The Corporate Library's 10 highest paid CEOS of 2008 report showed, compensation packages rose -- despite a weakening economy and falling shares of all 10 companies on the list.

And the executive rewards have been especially sweet for Michael Jeffries, CEO of teen retailer Abercrombie & Fitch. Jeffries earned $71.8 million in total realized compensation in 2008, according to The Corproate Library. He also spent $1 million for personal use of the corporate jet, Leder notes. Meanwhile, shares of ANF tanked 70% in 2008. 

To be sure, the '08 compensation packages (revealed in '09 proxy filings) were likely penned a few years ago during the boom. Also, big chunks of total compensation reflect the exercising of options. 

Big picture though, the clubby world of executive pay isn't seeing dramatic changes, unlike the rest of the American economy.

The top 10 highest paid CEOs of 2008 are (Figures reflected total realized compensation):

  • Blackstone Group, Stephen Schwarzman, $702.4M
  • Oracle, Larry Ellison, $557M
  • Occidental Petroleum, Ray Irani, $222.6M
  • Hess, John Hess, $159.6M
  • Ultra Petroleum, Michael Watford, $117M
  • Chesapeake Energy, Aubrey McClendon, $114.3M
  • XTO Energy, Bob Simpson, $103.5M
  • EOG Resources, Mark Papa,  $90.5M
  • Narbors Industries, Eugene Isenberg, $79.3M
  • Abercrombie & Fitch, Michael Jeffries, $71.8M

140 Comments

Yahoo! Finance User
Yahoo! Finance User - Wednesday August 19, 2009 10:03AM EDT

Boy wish I could get paid millions to run a company into the ground, heck a 5 year old could do that.

James
James - Wednesday August 19, 2009 10:09AM EDT

They lose money, but people still foolishly buy their stocks. The P/E of the S&P 500 is now an incredible 140. To be at historical norms, the S&P 500 should right now be around 115, not almost 1000. Who is buying these worthless stocks and propping them up?

holy smokes
holy smokes - Wednesday August 19, 2009 10:12AM EDT

We are sooo screwed, I have people come through my shop every day with safety issues, brakes and steering worn out. They cannot even drive a safe car and we have to see this. I have never owned a gun in my 53 years, but I really am thinking about it now. I am not a BULLiever

taopraxis
taopraxis - Wednesday August 19, 2009 10:20AM EDT

If you want to understand the true rate of inflation, look at CEO salaries, because they are among the only people in a position to keep their wages at parity. Lots of articles today are warning the Fed to reveal its exit strategy to the market, if only to reinforce people's illusions. There is no exit strategy because no exit is possible. The Fed is like a drunken bus driver throwing back monetary shots while assuring his passengers (us) that he has a secret strategy to keep the bus on the road after he passes out.

Yahoo! Finance User
Yahoo! Finance User - Wednesday August 19, 2009 10:21AM EDT

If you voluntary give them your money whay tney should refuse? Greed.Who is greedy?

san
san - Wednesday August 19, 2009 10:23AM EDT

It is nepatism at it's finest, and what kills all great economies. Get the jobs advertised in the newspaper, offer £500k salary and if nobody applies for it then you know the wage was too low!!!

Mangrove
Mangrove - Wednesday August 19, 2009 10:26AM EDT

The Rich Get Richer. Ha!!! You can say that again. What do you expect ffom the current administration? They only know how to spend and pile up national debt. You voted for a change in the past, that's what you got now. So don't complain, you got what you want, don't you???!!!

Tex
Tex - Wednesday August 19, 2009 10:29AM EDT

That's Capitalism; that's free market economics; let them stash their millions in foreign accounts; don't tax them to pay for health care and other social needs. Right Ron Paul?

Yahoo! Finance User
Yahoo! Finance User - Wednesday August 19, 2009 10:31AM EDT

chuck THE SHAREHOLDERS ARE ALWAYS LIEED.......................

Frankie
Frankie - Wednesday August 19, 2009 10:35AM EDT

People, wake up ! Like shineystuff101 says,,, "we are soooo screwed!" If you think these CEO's care about you and your family, think again! CEO's, CFO's, etc., and the like are in it for themselves. Once you get that high up on the food chain, their philosophy is, get all you can off the backs of everyone else and if you have to screw the rank and file, so be it ! I work for a large company and every quarter I hear them spout their mouths and get everyone all pumped up about what great job we're doing, but behinds the scenes, they're busy filling their pockets while we're all breaking our backs to keep our heads above water and have enough money till the end of the month !!!!! I've worked for too many years and had enough shoe prints on my back! They can all go the h......!

Yahoo! Finance User
Yahoo! Finance User - Wednesday August 19, 2009 10:37AM EDT

Don't corporations realize that it makes more economic sense, improves productivity more, and promotes a sense of fairness (resulting in long-term commitment to a company) to give 10,000 people a $10,000 bonus for their hard work, rather than to give one person $100 million? Or if that isn't enough money to motivate, give 1,000 people $100,000.

Mike
Mike - Wednesday August 19, 2009 10:39AM EDT

Gee... I wonder how the return on investment to the shareholders would be effected if these CEO's (and other C and V level employees) had a more realistic reward package. Just more evidence that that these companies are made up of people who are most interested in THEIR own compensation... not the return to the investor. Pathetic...

Mike
Mike - Wednesday August 19, 2009 10:40AM EDT

Popoy, English as a second language is OK, But where on Earth is Denamark? Oh, but by the way, top taxation in the UK is 40%, that's why the football players are off to Spain. On a financial post you should get your spelling and facts correct, yeah? And Jim, you initially say that the P/E is 140 and then talk about an "almost 1000". I believe that both you idiots trade and are trying to put the market down, then up, then down, then up. Remind you of something...regard your foreskins lads and stop talking drivel.....

Reedersong
Reedersong - Wednesday August 19, 2009 10:43AM EDT

Yeah, and Blackstone Group cut the 401K match on their Catalent Pharma business!

harshing_my_mellow@rocketmail.com
harshing_my_mellow@rocketmail.com - Wednesday August 19, 2009 10:43AM EDT

There are a lot of social evils out there, it just the new resident evil is Corporate America. Who are any of you trying to fool with this shock over executive pay? Are they compensated fairly? Who knows? I do not know what they do to earn their pay. Neither do most of you. Seems like the big push is on to "limit corporate pay" ... Because? Because? Maybe you should find out who is making these people the new Boogey Man and ask them why this is the new problem? You will chastize these people and never blink an eye when a professional athlete signs a multi-million dollar contract and plays like junk? Look at how much compensation some of these bailed out corporations are paying their executive management teams. These people have contracts that pay regardless of the results and are backed by the American TAX DOLLAR. Yet, you are all out of sorts over these guys??? Seems to me the best approach to take to hide a transgression is to make something else more important. Don't any of you people even care how your tax dollars are being spent???

taopraxis
taopraxis - Wednesday August 19, 2009 10:45AM EDT

Capitalism is not a system of central banker/planner rigged markets and taxpayer-funded bailouts for favored insiders. There are no free markets on this planet.

Yahoo! Finance User
Yahoo! Finance User - Wednesday August 19, 2009 10:45AM EDT

Occidental Petroleum, Ray Irani, $222.6M - I was surprised to see this name, he was CEO when I worked for Oxy in the early 90's, he's made a lot of money between then and now.

Rey
Rey - Wednesday August 19, 2009 10:46AM EDT

Things are not going to change Ever. Let's keep it light / I have a riddle for all you guys / 2 Days ago Mary was 5 years old Next Year she's gonna be eight Years Old What is todays Date And when is her Birthdate

the Truth Seeker
the Truth Seeker - Wednesday August 19, 2009 10:47AM EDT

The executive pay will not be changed by neither party, because both parties, including Obama receives campaign donations from Wall Street corporations. It is a conflict of interest for the government to regulate Wall Street. Essentially, when Wall Street make risky bets, the American taxpayers have to pay and pick up the pieces; when stock prices go up (i.e. Goldman Sach, JPM Chase), the executives pockets billions in bonuses. Nothing has changed, as Obama would have us believed.

Mike
Mike - Wednesday August 19, 2009 10:48AM EDT

The C- and V- level pay programs are the ultimate caste system in corporate america. I mean come on people - it's been proven you can drive a company into bankruptcy and still be paid multi-million dollar packages... because we, the investor, are just piggy banks for these elitists, they have no problems at all watching their companeis go into the tank, they have nothing to lose. It's sad really.

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