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Mon Feb 17, 2014, 10:20 PM

Dean Baker: Corporate Cronyism: The Secret to Overpaid CEOs

Corporate Cronyism: The Secret to Overpaid CEOs

Monday, 17 February 2014 10:59
By Dean Baker, Truthout | Op-Ed

It's hardly a secret that the heads of major corporations in the United States get mind bending paychecks. While high pay may be understandable when a top executive turns around a failing company or vastly expands a company's revenue and profit, but CEOs can get paychecks in the tens or hundreds of millions even when they did nothing especially notable.

For example, Lee Raymond retired from Exxon-Mobil in 2005 with $321 million. (That's 22,140 minimum wage work years.) His main accomplishment for the company was sitting at its head at a time when a quadrupling of oil prices sent profits soaring. Hank McKinnel walked away from Pfizer in 2006 with $166 million. It would be hard to identify his outstanding accomplishments.

But you don't have to be mediocre to get a big paycheck as a CEO. Bob Nardelli pocketed $240 million when he left Home Depot after six years. The company's stock price had fallen by 40 percent in his tenure, while the stock of its competitor Lowe's had nearly doubled.

And then we have the CEOs in the financial industry, heads of huge banks like Lehman's, Bear Stearns, and Merrill Lynch, or the insurer AIG. These CEOs took their companies to the edge of bankruptcy or beyond and still walked away with hundreds of millions of dollars in their pockets. ....................(more)

The complete piece is at: http://truth-out.org/opinion/item/21908-corporate-cronyism-the-secret-to-overpaid-ceos

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