Well hard times come no more! According to The Guardian CEO pay survey it just got a little shinier for some in that city on the hill. While austerity and stagnation is the order of the day for the majority of Americans some of the country’s top bosses got pay increases of between 27 and 40% last year.
America's highest paid executive took home more than $145.2m, and as stock prices recovered across the board, the median value of bosses' profits on stock options rose 70% in 2010, from $950,400 to $1.3m
The top of the top came from the health care industry. The head of the world’s largest healthcare firm McKesson’s John Hammergren made over $145million in 2010 the majority from stock options.
Just for laughs here is some local perspective on how much money Hammergren’s $145million is in a human scale. In Vermont, Federal spending cuts to LIHEAP (Low Income Home Energy Assistance Program funding to low-income households) might ultimately result in funding to the state going from $27.5 million in 2011 to approximately $11.6Million for 2012.
One counter-intuitive gravity defying feature of high end pay packages is that stock prices may go down yet compensation continues to head up for some departing and retiring executives. Notice three out of these four highest paid departing or retiring CEOs were leaving companies where shareholder stock prices had declined during their tenure.
Ronald Williams, former head of Aetna, a health insurer, exercised 2.4m options for a profit of $50.4m. Aetna's stock price declined by 70% from when Williams assumed the role of CEO in February 2006 until his retirement. At pharmacy chain CVS, Thomas Ryan made a $28m profit on his options. During Ryan's 13-year tenure as CEO, CVS Caremark's stock price decreased almost 54%.
Omnicare's Joel Gemunder retired last August and received cash severance of $16m, part of a final-year pay package worth $98.28m. Adam Metz, the former boss of General Growth Properties, a real estate company that specialises in shopping malls, walked away with a $46m cash bonus in 2010. GGP executives received nearly $115m in bonuses from the firm as it emerged from bankruptcy.
It may always to be good at the top. However for most Americans, maybe “all they can do is stare from a distance at that city's glimmering towers” (to lift a line from part of a well known speech).
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