More U.S. CEOs received pay raises than cuts in '08: AFL-CIO

The AFL-CIO, the largest labour organization in the United States, said that 480 executives of 946 major American companies surveyed got pay hikes, while only 463 experienced pay cuts.

That gain was despite a year in which corporate equity valuations and financial performances for many firms plunged in the later half of 2008, according to a new study released Tuesday.

The U.S. survey, based upon available corporate proxy statements, showed that the average salary of American chief executive officers actually slid six per cent in the year.

The typical chief executive earned $10.4 million in total compensation in 2008, down compared to a pay envelope of $11.07 million one year earlier.

But, using as the yardstick the level at which 50 per cent of the CEOs of the 200 largest firms earned more and 50 per cent earn less — the median salary for executives actually rose 4.5 per cent in 2008 versus 2007.

The median result — rather than the average figure — is more indicative for a corporate sector that does not know the meaning of the word "restraint," the AFL-CIO said.

For example, only 39 executives, or 19.5 per cent of the 200 in a recent survey, did not receive bonuses in 2008, the union said.

The rule should be that "if there is no performance, there is no bonus," said Hye-Won Choi, senior vice-president and head of governance for TIAA-CREF, the big pension fund that manages money for teachers.

AFL-CIO site

The union launched its executive compensation website — complete with a "Boot the CEO" interactive game — on Tuesday in order to highlight large pay increases for executives even as the American economy falls further.

The median salary jump was two percentage points higher than the average private sector gain of 2.6 per cent for the last three months of 2008 versus the same quarter of 2007.

By contrast, the average worker gained 8.6 percentage points compared to the average executive in 2008.