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Forget about six- and seven-figure salaries. A median pay package for a chief executive in the U.S. hit a record $10.5 million in 2013, according to an Associated Press/Equilar pay study.
Median CEO pay has increased in each of the last four years.
While the banking industry experienced the biggest pay hike last year, health care tops all other industries for the highest median CEO pay for the fifth time in six years, said the AP.
The highest paid CEO in 2013 was oilfield executive Anthony Petrello of Nabors Industries, who pulled in a hefty $68.2 million salary. Click here for a list of the highest-paid CEOs in the U.S. last year.
While CEOs averaged an 8.8 percent raise in 2013, U.S. workers’ weekly wages increased just 1.3 percent in 2013, according to the Bureau of Labor Statistics. This equates to a chief executive earning 257 times the national average, which has skyrocketed from 181 times in 2009. The AP said:
“There’s this unbalanced approach, where there’s all this energy put into how to reward executives, but little energy being put into ensuring the rest of the workforce is engaged, productive and paid appropriately,” says Richard Clayton, research director at Change to Win Investment Group, which works with labor union-affiliated pension funds.
While many company boards of directors and investors claim that big pay packages are necessary to attract and retain top-caliber executives, it seems that executive pay has spun out of control. According to columnist David Lazarus with the Los Angeles Times:
The reality is that corporate boards, acting on the advice of professional salary consultants, routinely approve pay packages based on the relative perks enjoyed by a CEO’s “peers.”
Every time a fatter package is approved, therefore, the bar is raised for all other CEOs. It’s a never-ending game of more-more-more.
Executive pay practices may be getting a tiny bit better, at least at some companies. The AP said three-quarters of shareholders at Chipotle Mexican Grill this month voted against a pay package for co-CEOs Montgomery Moran and Steve Ells.
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