Executive Excess 2013: Bailed Out, Booted, and Busted

Executive Excess 2013: Bailed Out, Booted, and BustedThis 20th anniversary Executive Excess report examines the “performance” of the 241 corporate chief executives who have ranked among America’s 25 highest-paid CEOs in one or more of the past 20 years.

The lavishly compensated CEOs we spotlight here should be exemplars of value-added performance. After all, sky-high CEO pay purportedly reflects the superior value that elite chief executives add to their enterprises and the broader U.S. economy.

But our analysis reveals widespread poor performance within America’s elite CEO circles. Chief executives performing poorly — and blatantly so — have consistently populated the ranks of our nation’s top-paid CEOs over the last two decades.

The report’s key finding: nearly 40 percent of the CEOs on these highest-paid lists were eventually “bailed out, booted, or busted.”

  • The Bailed Out: CEOs whose firms either ceased to exist or received taxpayer bailouts after the 2008 financial crash held 22 percent of the slots in our sample. Richard Fuld of Lehman Brothers enjoyed one of Corporate America’s largest 25 paychecks for eight consecutive years — until his firm went belly up in 2008.
  • The Booted: Not counting those on the bailed out list, another 8 percent of our sample was made up of CEOs who wound up losing their jobs involuntarily. Despite their poor performance, the “booted” CEOs jumped out the escape hatch with golden parachutes valued at $48 million on average.
  • The Busted: CEOs who led corporations that ended up paying significant fraud-related fines or settlements comprised an additional 8 percent of the sample. One CEO had to pay a penalty out of his own pocket for stock option back-dating. The other companies shelled out payments that totaled over $100 million per firm.

Over the past 20 years, we have seen no shortage of creative and practical proposals for reining in excessive executive compensation. Three pending reforms strike us as particularly urgent:

  1. CEO-worker pay ratio disclosure: Three years after President Barack Obama signed the Dodd-Frank legislation, the SEC has still not implemented this commonsense transparency measure. The reform would discourage both large pay disparities that can harm employee morale and productivity and excessive executive pay levels that can encourage excessively risky behavior.
  2. Pay restrictions on executives of large financial institutions: Within nine months of the enactment of the 2010 Dodd-Frank law, regulators were supposed to have issued guidelines that prohibit large financial institutions from granting incentive-based compensation that “encourages inappropriate risks.” Regulators are still dragging their feet on this modest reform.
  3. Limiting the deductibility of executive compensation: At a time when Congress is debating sharp cuts to essential public services, corporations are able to avoid paying their fair share of taxes by deducting unlimited amounts from their IRS bill for the cost of executive compensation. Two bills, the Stop Subsidizing Multimillion Dollar Corporate Bonuses Act (S.1746) and the Income Equity Act (H.R. 199) would fix this outrageous loophole and significantly reduce taxpayer subsidies for excessive CEO pay.

VIDEO of this year’s findings:

READ THE FULL REPORT (CLICK TO DOWNLOAD PDF)

Download the compensation data (.xlsx) for the top 25 highest paid CEOs each year from 1994-2013.

Explore all 20 Executive Excess reports from 1994-2013.

  • http://batman-news.com Rhondayes

    You’re a fool or job secure and being paid well enough to overlook the looting at the top. There’s no jealousy. There’s outright anger at those being paid so much, that the people to help create the success of the company are left out of the rewards of the company. That the annual earned garden variety increase is not being given to the employee, but relabeled “profits”. That’s not capitalism. that’s greed. How could you possibly believe this is jealousy? That’s predatory capitalism without a conscience or bit of shame. A pat on the back for themselves for outsmarting the very people that helped to create their wealth and abundance. And, you sit back in judgement and applaud.

  • http://batman-news.com Rhondayes

    Vacations…Do you remember being able to take vacations without concern over how to pay for them? Now, you’re lucky if you can afford a movie once a month or do we go the Netflix route…again.

  • http://batman-news.com Rhondayes

    Back before the early 80s-90s really got rolling, ALL boats were rising. CEOs were rock stars. Then, they turned on the very people helping to create the profits and success. CEOs were admired, held on a pedestal; and morale was high. Then, employees became the prey; unions that protected the employees made the problem to be destroyed.

    You guys want to keep the working poor, poor. Minimum wage stops people for slipping into a quagmire of poverty and creating a drain on the economy. You smug prig. How would you like being held to $7.25 an hour for the rest of your life, though every year without fail prices continue to rise on transportation costs, mortgage, rent, commuting, food…most people can’t afford insurance or training for living wage careers to improve their economic outlook. Still, there you people are with your boots in their necks holding these people down. An increase in minimum wage doesn’t limit job growth…stagnated wages does. Minimum wage assures food security for starving children and a roof over their heads. We have in this great country of wealth and opportunity 44% of working people that are homeless. Still, you grouch, from on high, over these people receiving a dollar or two more an hour. Still, not enough, but a pacifier.

    Here’s a blessing for you and the others that feel as you do: May your wishes for those in need of a living minimum wage, become your reality.

    http://youtu.be/bBx2Y5HhplI