Tuesday, October 4, 2011

Kevin Drum on skyrocketing pay for CEOs

Adjusted for inflation, cash compensation for line workers has actually decreased over the past few decades, and even when you include healthcare compensation it's grown only about 30% or so. In contrast, executive compensation over the same period has more than quadrupled.

Do they deserve this? Almost certainly not. There's simply no good reason that a CEO of 2011 is worth 4x more than a CEO of 1970. The reason their pay has gone up is simple: for all practical purposes, CEOs set each others' pay. And they keep raising each others' pay because they can. It's a pretty nice racket.

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