Today there is more evidence the economic recovery is treating Wall Street and Main Street very, very differently.
Yesterday we told you how corporations were reporting profits rising 17% last quarter. That's nothing compared to how much the heads of these businesses are being paid. The median pay package for the head of a company in the S&P 500 was about $9 million in 2010 – 24% higher than a year earlier and the highest in recent memory.
In 2007, when the economy was booming, the median pay was less than $8.5 million. In 2008 it was about $7.5 million, and even lower than that in 2009. Again that's the median - some CEOs made much more than that.
The highest paid in 2010 was the head of Viacom. His $84.5 million package was two and a half times what he made the year before. And the top ten made $440 million in 2010, a third more than the top 10 made in 2009.
Why the big bonuses? For starters, profits for these companies rose 41% last year. That could be why the biggest gains in pay came in the form of cash bonuses. About two-thirds of execs got a bigger bonus than they had in 2009- some more than three times as big.
The bigger profits helped push up the typical cash bonus given to a CEO by 39% in 2010 to two million dollars. Also stocks rose 13% in 2010, and have now almost doubled since March 2009.
Companies granted their CEOs $1.3 billion in stock in 2010 - up about $300 million from the year before. Because of the jump in the markets, those stock options are now worth more than $700 million dollars - about $27 million more than the year before.
That's great for them – I love it when American businesses do well. But here's where I have an issue - that success is not trickling down to the average family. Pay for workers grew only three percent in 2010 - compared to the 24 percent for CEOs. The average wage is about $40,500 a year - less than one half of 1% of what the typical CEO made.
Government rules now do require almost every public company give investors a vote at least once every three years on what it pays its executives - but so far shareholders for only 12 companies have voted against pay plans.
The stock market booming, profits soaring...those are all good things for Americans, I know that. But if you're one of the more than 13 million out of work - it's hard to be excited about a bull market.
If Main Street isn't feeling it - there is no recovery.