Clueless CEOs bad for business

Some top executives just don’t have a clue about the real world, the world where their customers and employees struggle to cope with the rising cost of food, fuel and other necessities.

A new report by the Associated Press shows that CEOs at many of the largest companies in PAULSON+MONEY.jpgthe U.S. were paid better last year than they were in 2007 — “when the economy was booming, the stock market set a record high and unemployment was roughly half what it is today.”

AP’s study found that the typical pay for the top exec at a Standard & Poor’s 500 company was $9 million last year, up 24 percent from 2009.

Wow! Most workers haven’t had any bump in pay since before the Great Recession, much less a 24 percent increase. Twenty-four percent! How is that possible?

The New York Times published a similar report on excessive executive pay a few weeks ago.

In a column I wrote for the News Sentinel last month, I criticized out-of-control CEO pay. Some readers took issue with my position, suggesting that I don’t understand how the free market works.

Well, I do understand. I understand that the image of a CEO getting a million-dollar pay raise while many workers receive no raise at all, isn’t good for business.

I understand that shareholders should demand that their money be spent on job creation, new product development and other things that create real value for their companies instead of padding the pockets of already high-paid executives.

AP: CEO pay exceeds pre-recession level

New York Times: The Drought Is Over (at Least for C.E.O.’s)