I’ve had the opportunity, just lately, to offer some insight to a couple of very young people entering the work force of the real world for the first time.
Although they are pursuing two very different careers, my observations to both were the same: You can’t start at the top. This is a fact of life that we all face at one time or another, usually with the first paycheck after the first 40 hour work week.
Although I never really expected to be at the top, I never dreamed that the difference in pay, from up above to down below, would be so enormous.
I followed Richard Grasso’s resignation as chairman and CEO of the New York Stock Exchange. Grasso is going to get about $135 million in pay and retirement benefits. This caused an uproar which eventually forced his reluctant resignation.
Frankly, if I had that kind of money coming, I wouldn’t be at all reluctant to resign. I was a little worried, but let’s face it, he’s been gone over a month now and I don’t miss him at all.
I looked at Jeffrey R. Immelt, CEO of GE. According to the AFL-CIO website, Immelt’s 2002 compensation package totaled $22,918,357. Maybe a little more if stock options are considered. Of this his salary was $3,000,000, and he received a bonus of $3,900,000.
By GE standards, Douglas N. Draft, CEO of Coca-Cola is underpaid. His 2002 package was just $5,830,785. He only received $1,500,000 in salary, but he got a bonus of $4,000,000.
Haliburton Co. CEO David J. Lesar, in 1992, pulled in a total of $10,284,014 including a bonus of $2,200,000 and a salary of $1,000,000. And then, there’s Wal-Mart.
In 2001, CEO H. Lee Scott Jr. received a salary of $1,123,007, a bonus of $1,784,750 and other miscellaneous monies for a total of $21,740,520. That’s miles and miles from the checkers, the shelf stockers, the secretaries and even the store managers.
These compensation packages are only a tip of the iceberg. At the same time that workers’ retirement savings have suffered through the stock market decline, hundreds of millions of dollars are being stuffed into retirement deals for the executives even though their pay is already way out of line with company performance.
These executives have negotiated retirement benefits that promise a lifetime of income, thousands and thousands of dollars more than what they would get under the retirement plans of their rank-and-file workers.
Many companies have made arrangements that guarantee the benefits to the executives even if the company goes bankrupt or there’s accounting fraud.
Ken Lay, CEO of Enron, got $12,000,000 from an insurance policy that was protected from Enron’s creditors.
How did these salaries get to so out of hand? How much more important than their workers are these people? Once, it might have been measured in thousands, but now it’s measured in millions.
And speaking of millions, a new movie scheduled to be released in December is “Cold Mountain.” This is based on a book by Charles Frazier about the Civil War. Now if there is one historical event that is ours and ours alone, it would be the Civil War. It was fought entirely in the United States. “Cold Mountain,” the book, takes place, for the most part, in the Carolina mountains, and for the other parts, in the southern United States.
The movie, when finished, is expected to cost about $80 million.
They say that’s modest for a movie these days. By the way, the movie will be filmed, with only a few exceptions, in the remote mountains and valleys of Transylvania, Romania.
Reprinted from the Nov. 6 issue of The Labor Paper, published by the West Central Illinois Building and Construction Trades Council, 400 N.E. Jefferson, Peoria, IL 61603.
Mary Sheets can be reached at firstname.lastname@example.org.