Happy New Year, Welcome to 2009!Posted by: Kenny Chan onJanuary 2nd, 2009
As some of you are recovering from the holiday celebrations and trying to get back into the work groove, I have to pass on some news that may take away all that new years motivation you may have. As of 9:04 this morning, you know… just barely after you started up your computer and checked your e-mails and right after you read some of the latest threads on beyond (its okay, we’re all hooked) the top CEOs in the country already made more money than the average worker would in all of 2009.
In 2008, much attention was put on executive salaries as the world credit crunch put a squeeze on companies across all industries. Ford CEO Alan Mulally made $39M in just 4 months while the automaker lost $12.6B in the same year. Chrysler CEO Robert Nardelli made $25M a year while at the helm of Home Depot. During his 6 years with Home Depot, the company’s earnings continued to lag behind those of its competitors, so the board got rid of him. Thats good right? Nope. Nardelli got a hefty severance package worth a cool $210M! Today, at Chrysler he is silent about his pay since he does not need to report it as Chrysler is not a public company. General Motors CEO Rick Wagoner got a 33% pay raise for 2008 for his performance in 2007, when the company lost a whopping $38.7B. All three of these automakers asked for, and got a nice hefty Federal bailout.
Roger Martin, dean of the Rotman School of Management, said the gap between low-end and highest-end earners began growing in earnest in the 1980s and accelerated in the 1990s, something Martin attributed essentially to greed.
All is not lost though, for 2009 all of us will make more (salary at least) than both the Ford and GM CEOs as they will only be paid $1 for all their work. Their voluntary pay cuts were a sign of good faith as they stuck their hands out for the billions in bail out money doled out.
Hope everyone has a great 2009! :)