By Evan Henerson
L.A. Times business columnist David Lazarus pretty much nailed it in his indignation over the pension payments enjoyed by CEOs.
The data is the stuff of outrage: an average American CEO makes between 271 and 354 times what a worker in his company earns depending on the source. The disparity internationally is slightly less awful: German CEOs makes 147 times more than their workers, British CEOs earn 84 times more, Japanese CEOs 67 times more.
Of course, to get to these statistics, you have to read to the end of Lazarus’s excellent column … which is no easy task since early on in the piece, he drops the nugget about former Equifax CEO Richard Smith “retiring" from the embattled credit agency with a pension of more than $18 million.
That’s not the easiest statistic to digest. Many folks are probably seeing red and having steam coming out of their ears by that point.
“In other words, you may be looking over your shoulder for the rest of your financial life thanks to Equifax,” Lazarus writes. “The company’s former boss never has to work again. And Smith’s not alone. Many CEOs of large companies have pensions coming their way as part of their compensation packages.”
The article goes on to talk about compensation packages that CEOs negotiate, often with the help of agents. Members of the board of directors get some pretty heavy payouts themselves. Equifax gives each board member an annual retainer of $80,000 plus an additional $25,000 of they chair a board committee, not to mention a one-time allotment of $175,000 in stock, etc. etc. Once it’s all said and done, Equifax board members are earning about $250,000 per year?
Smith? No tears necessary. We’ve already blogged about his $90 million exit. The man was even given credit for serving 17 years with Equifax when he only served 12 as compensation for the pension benefits he forfeited when he left General Electric.
“I’m also a big fan of leading by example. Thus, lawmakers eager to reshape the U.S. healthcare system should be required to have the same coverage as everyone else.
By the same token, CEOs should have the same retirement plans as their subordinates. If they feel like a 401(k) with limited annual contributions doesn’t provide sufficient security, well, get in line, bub.”
Read the rest of the article here.