1. CEOs Who Downsize Workers are Rewarded. IPS and UFE studied CEO pay at U.S. corporations that announced layoffs in 1997 of 3,000 or more workers. Of the 16 firms for which data were available, all but three were rewarded last year in terms of annual compensation. Nine of the 16 increased CEO salary and bonuses by an average of 20 percent. Four of the 16 firms did not increase salary and bonus, but rewarded CEOs through generous outlays of stock options grants. Twelve of these downsizing CEOs are highlighted in The Downsizer Dozen section of this report.

2. Banking Executives Who Made Bad Loans in Asia Are Rewarded. CEOs of the six U.S. banks with the largest outstanding loans to Asia received raises in salary and bonus averaging about 16 percent last year. While the International Monetary Fund (IMF) is bailing out these banks, millions of workers in Asia and the United States will lose their jobs as a result of the Asia crisis.

3. CEOs Who Have Shifted Jobs to Mexico Have Benefited. CEOs of the 10 companies that have moved the most jobs from the United States to Mexico since the passage of NAFTA earned average salaries and bonuses last year of more than $3 million, a 15 percent increase over 1996. The leading job-shifter, General Electric’s John Welch, made nearly $40 million in total compensation—more than his 10,000 Mexican workers combined.

4. The Response to Runaway Executive Pay is Building. Finally, this report documents a growing
momentum in Congress among citizen groups and in the business community to close the wage gap. One response—the proposed Income Equity Act—would add a half-billion dollars in federal revenues by closing the corporate tax loophole on excessive CEO pay. On the other end of the pay scale, congressional leaders are calling for an increase in the minimum wage, which would now stand at $40.97 if it had increased as fast as CEO pay has increased since 1960.


Explore all Executive Excess reports from 1994 onward.

United for a Fair Economy is a national, independent, non-partisan organization founded in 1994 to focus public attention and action on economic inequality in the United States—and the implications of inequality on American life and labor. United for a Fair Economy provides educational resources, works with grassroots organizations and supports creative and legislative action to reduce inequality. The Institute for Policy Studies is an independent center for progressive research and education founded in Washington, DC in 1963. IPS scholar-activists are dedicated to providing progressive politicians, journalists, academics and activists with exciting policy ideas that can make real change possible.

Get more news like this, directly in your inbox.

Subscribe to our newsletter.