Bloomberg News has a good piece on how companies inflate CEO pay by comparing them to “peers” that are out of their league.

It focuses on CBS Corporation and its CEO Les Moonves, who got paid 70 million bucks last year, or more than 5 percent of the company’s profits. Sumner Redstone split CBS off from Viacom in early 2006 and he’s chairman of both companies. For that, Redstone got $41 million last year and Viacom’s CEO got $43 million. That’s $153 million in executive comp for what six years ago was one company. And that’s including your CFOs and COOs and the like.

Add those guys in, and CBS paid its top five executives $117 million last year (Viacom’s took in $109 million).

That $70 million isn’t an aberration for CBS and Moonves. He raked in $58 million the year before and $43 million in 2009. In 2008, when CBS shares collapsed, shedding some 70 percent of their value, CBS still handed Moonves $32 million for the dubious distinction of doubling the Dow’s fall that year. The CEO game is one heckuva racket.

Bloomberg shows that by reporting how CBS cherry-picks the competitors on which it bases its compensation levels. Its board just so happened to pick peers that were twice as big as CBS, including non-entertainment giants like General Electric and IBM. Big companies pay their executives more on average than small companies do:

Such lopsided comparisons aren’t unusual at U.S. corporations. To justify how much they offer CEOs, board compensation committees measure against the pay of CEOs at other companies, often picking larger firms from different industries that pay more and don’t consider themselves rivals for management prospects.

Bloomberg analyzed numbers from a compensation-data firm to find companies whose comparison companies are much bigger and/or much different than themselves. While it says CBS’s comps are some of the most egregious of any company in the S&P 500, they’re not unusual. It reports that most studies have found companies bias their comps upward, which inflates the number they can justify paying their executives. I’d like to see a chart of the findings.

We’ve seen these kinds of numbers enough that we’ve gotten somewhat inured to them. But it’s worth pausing to think about this stat:

The adjusted average compensation of CEOs in the S&P 500 (SPX) rose to $12.9 million in 2011, or 380 times the average worker’s pay, up from $625,000, or 42 times the average worker’s pay, in 1980, the AFL-CIO said in a report released this month.

Good work by Bloomberg.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.