Corporate Executive Pay Soars. Wages For Working Americans? Not So Much…

Jamie Dimon, CEO at JPMorgan Chase

Unemployment still hovers near 9 percent. Millions of Americans are struggling to find a job. The American economy is in a rut, wages for ordinary workers are down or stagnant, and there appears to be no end in sight to to economic doldrums.

Think it’s all bad news? Think again. At least corporate executives are getting paid obscene a mounts of money again.

The New York Times reports that executive compensation for the CEO’s of America’s largest businesses went up in 2010 by an even larger amount than previously estimated. With the economy rebounding slightly from the recession of 2008-2009, the titans of corporate America finally saw their average pay increase. By a  lot.

A report completed earlier this year said that executive compensation soared by 12 percent at America’s top corporations. That estimate proved wrong. A more thorough examination of the data shows that corporate executive pay went up a stunning 23 percent in 2010, to a very healthy average of $10.8 million.  And many CEO’s are making more in average salary now than they were before the economy tanked.

A preliminary examination of executive pay in 2010, based on data available as of April 1, found that the paychecks for top American executives were growing again, after shrinking during the 2008-9 recession.

But that study, conducted for The New York Times by Equilar, an executive compensation data firm based in Redwood City, Calif., was just an early snapshot, and there were even more riches to come. Some big companies had not yet disclosed their executive compensation.

So Sunday Business asked Equilar to run the numbers again.

Brace yourself.

The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. The earlier study had put the median pay at a none-too-shabby $9.6 million, up 12 percent.

Total C.E.O. pay hasn’t quite returned to its heady, prerecession levels — but it certainly seems headed there. Despite the soft economy, weak home prices and persistently high unemployment, some top executives are already making more than they were before the economy soured.

Pay skyrocketed last year because many companies brought back cash bonuses, says Aaron Boyd, head of research at Equilar. Cash bonuses, as opposed to those awarded in stock options, jumped by an astounding 38 percent, the final numbers show.

Granted, many American corporations did well last year. Profits were up substantially. As a result, many companies are sharing the wealth, at least with their executives. “We’re seeing a lot of that reflected in the pay,” Mr. Boyd says.

While the Times notes that profits were up at many of the businesses that boosted executive pay, it would surprise many Americans to find out that a large number of the corporations doling out huge salaries and even bigger bonuses actually struggled last year.

A chart accompanying the Times article shows that compensation doesn’t always match company performance.

Contrary to the fat salaries of executives, wage growth for average American workers is no keeping up. Wage growth since the recession ended has been flat and is lagging dangerously behind inflation, “pinching” the financial security of working Americans.

And even in the years before the recession of 2008, wage growth for ordinary Americans was depressingly stagnant while as jobs were created and productivity increased.