CANADIAN LABOUR:

AVERAGE CEO MAKES 155 TIMES MORE THAN AVERAGE CANADIAN WORKER:

It now the evening of Monday, January 3, and the average Canadian annual wage has already fallen well below that of an average of the 100 top CEOs in this country. In actual fact this happened at 2:30 pm earlier today. As the following press release from the Canadian Centre For Policy Alternatives points out the average top CEO makes 155 more money than the average Canadian.

Does this means, as the myth often says, that they "work harder" than the average Canadian ? For this to be true there would have to be 760 hours in each day, and the CEOs would have to work every second of them. Do they magically "create value" by their cunning business decisions ? If that was true then their remuneration should drop when the company they are in charge of drops in value or income, a thing that rarely happens. As the title of the following makes plain CEO pay is "recession proof". Bonuses come whether the company does well or poorly.

Leaving aside the question of the recent massive bailouts of business by government and the mostly invisible day to day subsidies provided by government I would challenge anyone to prove that any CEO has made a cunning non-obvious decision in any company that increased its value to anywhere near the amount these people are paid. In actual fact most companies "run themselves" despite management decisions. Management, of which CEOs are the "big fish" are better pictured as some sort of tube worm existing parasitically on the body of the company fish. They are hardly ever "propellers" that drive the firm forward.

Is this sort of inequality justified in any society ? What are its costs, and I don't mean merely monetary ones ? Things to ponder. Here's the press release. You can read the full17 page report at the Policy Alternatives website.

CEOCEOCEOCEO

Canada’s best-paid CEOs ‘recession-proof’: study
January 3, 2011
TORONTO – Canada’s best-paid 100 CEOs breezed through the worst of the recession with earnings 155 times higher than the average Canadian income earner, says a new study by the Canadian Centre for Policy Alternatives (CCPA).
The study, Recession-Proof, looks at 2009 compensation levels for Canada’s best paid 100 CEOs and finds they pocketed an average of $6.6 million during the darkest period of the recession – a stark contrast from the total average Canadian income of $42,988.

“At this rate of reward, this handful of elite CEOs pocket the equivalent of the average Canadian wage by 2:30 pm on January 3 – the first working day of the year,” says the study’s author and CCPA Research Associate Hugh Mackenzie.

The study shows executive compensation in Canada wasn’t always this rich. In 1998, the best paid 100 CEOs pocketed an average of 104 times more than the average Canadian wage earner, compared to 155 times more in 2009.

“Even that extraordinary number understates the real story,” says Mackenzie. “Thanks to a change in corporate reporting introduced in 2008, we only have a conservative statistical estimate of the stock options that make up about one third of CEOs’ 2009 pay. The public will never know how much most of these CEOs actually got paid in 2009.

“And that’s only half the story. These CEOs are sitting on $1.3 billion of stock options they haven’t yet cashed in. That’s about $2 in future income for every $1 they declared in 2009.”

When the CEOs decide to exercise those stock options, the study reveals Canadians will subsidize that bonus with an estimated average of $360 million in foregone taxes, since stock options are taxed at a lower rate, as if they are capital gains. Among Mackenzie’s recommendations: getting rid of that expensive and unfair loophole.

The study highlights the role that soaring executive compensation plays in the dramatic growth in income inequality in Canada identified in a recent CCPA study by Senior Economist Armine Yalnizyan. Yalnizyan found that fully one third of all income growth in Canada in the past 20 years went to the richest 1% of Canadians.

–30–

For more information please contact: Trish Hennessy at (416) 551-2059 or Kerri-Anne Finn at (613) 563-1341 x306.

HUMOUR:

RECESSION OPINIONS:

ECONOMY:

YOU GO DOWN THEY GO UP:

Here's an interesting item from the American Institute for Policy Studies. It seems that the recession is hitting some (workers) much harder than it is hitting others (corporate management). Here's the story. You can access the full report at the IPS website. Please note that the IPS names names and salaries and that they also want this news spread as far as possible.>>>

CPCPCPCPCP
Executive Excess 2010: CEO Pay and the Great Recession
By Sarah Anderson, Chuck Collins, Sam Pizzigati, Kevin Shih

The 17th annual executive compensation survey looks at how CEOs laid off thousands while raking in millions.
America’s CEOs had a terribly rough 2009. Or so the national and regional executive pay surveys released so far this year would suggest. “CEOs See Pay Fall Again,” blared one headline early this past spring. “CEO pay rankings dominated by large salary cuts,” read another in June. “Silicon Valley bosses,” summed up still another, “get pay cut.” Month after month, the headlines have pounded home a remarkably consistent message: Corporate executives, here in the Great Recession, are suffering, too.

Corporate executives, in reality, are not suffering at all. Their pay, to be sure, dipped on average in 2009 from 2008 levels, just as their pay in 2008, the first Great Recession year, dipped somewhat from 2007. But executive pay overall remains far above inflation adjusted levels of years past. In fact, after adjusting for inflation, CEO pay in 2009 more than doubled the CEO pay average for the decade of the 1990s, more than quadrupled the CEO pay average for the 1980s, and ran approximately eight times the CEO average for all the decades of the mid-20th century.

American workers, by contrast, are taking home less in real weekly wages than they took home in the 1970s. Back in those years, precious few top executives made over 30 times what their workers made. In 2009, we calculate in the 17th annual Executive Excess, CEOs of major U.S. corporations averaged 263 times the average compensation of American workers. CEOs are clearly not hurting.

But they are, as we detail in these pages, causing others to needlessly hurt — by cutting jobs to feather their own already comfortable executive nests. In 2009, the CEOs who slashed their payrolls the deepest took home 42 percent more compensation than the year’s chief executive pay average for S&P 500 companies. Most careful analysts of the high-finance meltdown that ushered in the Great Recession have concluded that excessive executive compensation played a prime causal role. Outrageously high rewards gave executives an incentive to behave outrageously, to take the sorts of reckless risks that would eventually endanger our entire economy. Our nation’s leading political players have sought, sometimes with grand fanfare, to confront this reality. Leading politicos have been railing against excessive executive bonuses and inappropriately high incentives ever since the economy nosedived. Various executive pay reforms and regulations have even found their way into the statute book. The financial industry reform package enacted this July, for instance, codifies into law several long-term goals of the executive pay reform community, most notably a “say on pay” provision that hands shareholders

the right to take nonbinding advisory votes on executive compensation. Will measures like these rein in excessive executive rewards? Will they begin to significantly narrow the corporate pay gap? That appears doubtful. The UK, for instance, has had a “say on pay” provision on the books since 2002, and that provision has not prevented a continuing executive pay spiral. Despite the recession, UK executive compensation sits substantially above pre-“say on pay” levels. To bring executive pay back down to mid-20th century levels, we need reforms that cut to the quick, that recognize the dangers banks and major corporations create when they dangle oversized rewards for executive “performance.” Some reforms that would move us in that direction are now pending in Congress. Others have yet to make their way onto the congressional docket.

We offer, in this Executive Excess edition, our first comprehensive analysis of all these reform proposals, those already passed, those still pending, and those promising initiatives not yet on our U.S. political radar screen. Our goal: to rate the reform steps already taken and highlight the steps we still need to take. Thorough executive pay reform, we remain convinced, holds an important key to our healthy economic future.

HUMOUR:

WAITING FOR THE RECOVERY WAVE:

HUMOUR:

THOUGHT FOR THE DAY:

Here's Molly's little thought to ponder for the day:

"WHAT'S THE DIFFERENCE BETWEEN A RECESSION AND A DEPRESSION? ":

A recession is when your neighbour loses his job. A depression is when you lose your job. A recovery is when Steven Harper loses his job.

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Don't worry. Molly will return to this matter in a more serious way later.