The Washington Post spotlights this morning a somewhat-overlooked (this year, anyway) compensation aspect of our corporate-welfare kingpins: perks.
These are the kinds of things that can really get people riled up because they’re a bit easier to wrap your head around than the $700,000 the average Goldman Sachs employee will make this year (to help you out a bit with that: that’s $13,461 a week, $2,692 a working day, and $224 an hour, assuming sixty-hour weeks—and that 700 grand figure is weighed down by lower-earning secretaries and the like).
The Post, with the help of a compensation-data firm, looks at the biggest twenty-nine banks on the government teat last year, finding that they increased perks for CEOs by 4 percent in 2008. On average they each got $380,000 from things like private-jet use, chauffeurs, country-club memberships, companies paying their taxes for them.
The paper does well to contrast this increase—and recall, this came at a time when these banks were losing tens of billions of dollars of other people’s money—with that of non-financial companies not on the dole. They tightened their belts a bit, dropping perks 7 percent. Nice context.
And you mean a union guy gets to comment on a business story?
“These executives are already well compensated,” said Daniel Pedrotty, director of the AFL-CIO’s office of investment. “The notion that some of these folks can’t even leave a nickel on the floor, that they want to take every last dime and put it on the company card really rubs people the wrong way but points to a larger problem of lack of independence at the board.”
In other words, as the Post points out itself, these perks are small beer compared to the bonuses and base pay these CEOs take in, but they’re revealing of the mindset that pervades the country’s C-suites, especially in its banks.
The Post reports that the government’s corporate-welfare pay czar Kenneth Feinberg is planning to “curtail” stuff like country-club perks and those worth more than $25,000. And it also says some are voluntarily cutting back on them. But:
Still, some companies that have taken away perks are making it up to executives by boosting their pay. SunTrust Banks eliminated most executive perks in 2008, including financial planning services, club memberships and payment of taxes on the perks, according to a corporate filing. But the bank also noted that “base pay increases were made in 2008 to offset this reduction in perks.”
Good work by the Post here.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 firstname.lastname@example.org. Follow him on Twitter at @ryanchittum.