03/19/09

The American people are as mad as hell and aren’t going to take it anymore. There is a populist explosion coming and the fuse has been lit by the news that million of dollars in taxpayer bailout money has gone into the pockets of AIG executives in the form of bonuses for the great job they have been doing. AIG is just the tip of the executive compensation iceberg. For decades that iceberg has been adding tremendous size under the waterline. Kevin Phillips records the disproportionate growth in his book, Wealth and Democracy. According to Phillips corporate CEOs compensation was twentyfive times that of an hourly production worker in the late 1960s. By 1999 that number had skyrocketed to 419 times the compensation of that same production worker, provided that worker still had a job.

Between 1990 and 1998 executive compensation rose 481%. If you think that the compensation was tied to performance, the next figure ought to disabuse you of that notion. During those same years, 1990 through 1998, corporate profits rose 108%. This year the profit picture for most companies runs way down into the negative column. If you are a typical working stiff there is a good chance that you have the very great potential to be out on the street, but if you are a corporate executive, you can expect a bonus. Even if an executive does get tossed they usually get some nice parting gifts, as in the case of Robert Nardelli of Home Depot. He left in 2007 with a package worth $210 million dollars. The shareholders of Home Depot made sure that that would never happen again and restructured Nardelli’s sucessors package. That type of reaction has been a mere firecracker to what could potentially take place now. BOOM.