There has been a recovery in this country – for the very top. Needless to say, it hasn’t trickled down to everybody else. CEOs are making more money than they did before the financial crisis and Great Recession.
The typical pay package for the head of a company in the Standard & Poor’s 500 was $9 million in 2010, according to an analysis by The Associated Press using data provided by Equilar, an executive compensation research firm. That was 24 percent higher than a year earlier, reversing two years of declines.
Executives were showered with more pay of all types – salaries, bonuses, stock, options and perks. The biggest gains came in cash bonuses: Two-thirds of executives got a bigger one than they had in 2009, some more than three times as big.
CEOs were rewarded because corporate profits soared in 2010 as the economy gradually got stronger and companies continued to cut costs. Profit for the companies in the AP analysis rose 41 percent last year.
And the profits for countries at the high end of the range rose even higher. The 2011 Fortune 500 list was released yesterday (h/t Think Progress) it revealed boom times for America’s richest corporations.
All told, the Fortune 500 generated nearly $10.8 trillion in total revenues last year, up 10.5%. Total profits soared 81%. But guess who didn’t benefit much from this giant wave of cash? Millions of U.S. workers stuck mired in a stagnant job market.
Sure, these corporate profits derived partly from productivity gains, including workforce reductions. And many 500 companies are growing faster overseas than in the U.S. Nevertheless, we’ve rarely seen such a stark gulf between the fortunes of the 500 and those of ordinary Americans.
Three of the first four companies in the Fortune 500, by the way, are oil companies (Exxon, Chevron and Conoco-Phillips). Only Wal-Mart sneaks into the top four (it’s actually number 1).
Decades of corporate-friendly, aristocracy-friendly policies have managed to create an almost perfect Gilded Age bubble around the well-to-do. They don’t necessarily need their countrymen to do well for them to maximize their profits. The global reach of these corporations means that their profit margins depend as much on emerging markets like China or India or Brazil. So the most horrific implication of these numbers is that they may actually be sustainable.