CEO Pay Soars at Companies That Send Jobs Overseas

Biggest convention sponsors and political donors also pay CEOs more

| September 9, 2004

Big businesses often justify outsourcing by arguing that the money it saves is used to help stay competitive in a fierce global market. But more often than not, this money just ends up at the top of the corporate ladder, making sure a few people experience outsourcing's benefits while many more experience its down side. A new report, 'Executive Excess 2004: Campaign Contributions, Outsourcing, Unexpensed Stock Options and Rising CEO Pay,' shows that those CEOs whose companies are top outsourcers enjoy an average of 46 percent pay increases, well above the 9 percent average for all CEOs at 365 large companies. This spike in CEO pay further widens the recently-narrowed CEO-to-worker wage gap, which is currently 301:1. Though public pressure is beginning to check the most outrageous CEO pay plans, there are few signs of either outsourcing or inflated CEO compensation slowing down. Together, outsourcing and CEO pay hikes make for massive inequalities: while the CEO-to-worker wage gap is 400:1 for American call center workers, those same Americans look downright pampered compared to the 3,348:1 gap experienced by Indian call center workers employed by American companies.

What are CEOs doing with all this money? The study shows that the top CEO earners are also big political donors, with the 69 CEOs whose companies sponsored the Democratic and Republican conventions earning a 52 percent pay hike in 2003. It seems that outsourcers have significant leverage when it comes to influencing public policy, so the current effort in Congress to squash restrictions on stock option grants, the use of which have saved CEOs $3.9 billion in tax deductions, is hardly surprising. A new recipe for corporate power is emerging in America and outsourcing is the key ingredient. As jobs become scarce and wealth becomes more concentrated, it seems ironic that our country belongs to those who would rather find employees somewhere else. Talk about a conflict of interest.
-- Brendan Themes

Go there >>CEO Pay Soars at Companies That Send Jobs Overseas

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