Friday, January 05, 2007

Fat CEO pay seen a wider society concern

Today, soaring executive pay "offends most people's sense of fairness," said Archie Carroll, a recently retired business ethics professor at the University of Georgia. It "symbolizes more than anything else how out of touch corporate America, particularly CEOs and boards of directors, is with the rest of American society," he said.
The abrupt departure of Home Depot Inc. chief Robert Nardelli this week, with a $210 million exit package in hand, shows how skewed CEO pay can be, ethics experts say. Nardelli's exit package, which includes $20 million cash severance as well as a pension, deferred stock awards and stock options, equals the annual incomes of about 10,000 retail stock clerks making an average $21,000 a year.
In 2005, the ratio of CEO pay to average worker pay was 411-to-1, according to a report by the Institute for Policy Studies and United for a Fair Economy, two groups that focus on social justice issues. That compares with a 1980 ratio of 42-to-1, as calculated by BusinessWeek, the two groups said.

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