Not So Shocking Report Findings
A new study has finally put on paper and brought to light evidence of facts that the majority of the population, lately referred to as the 99%, have been trying to use against top paid CEOs and other billionaires for years. CEO's retaining the highest salaries have goals including successfully guiding their companies towards an increasingly excellent performance. Yet according to the report United for a Fair Economy released, their performances lately have proven to be only mediocre at best.
The research in the report takes a close look at each of the the stock price performance sheets from the ten companies that had the most highly compensated CEOS between 1993 and 1999. S&P500 served as the comparative entity and the results showed that during six of the seven yearly time periods immediately following a company's CEO making the top ten list, at least half of the list under-performed the S&P500. Worse still, companies lagged behind the S&P500 by over 15% (based on a point value system) in 40% of the cases.
The Author Speaks Out
Co-director of the Responsible Wealth project at United for a Fair Economy, Scott Klinger, spoke out in his report. "CEOs justify their pay packages by saying they generate tremendous wealth for shareholders, but it's a myth that CEOs are paid for excellence. Typically, their companies don't deliver excellence. Companies with more limited wage gaps are actually better bets for shareholders."
An Eye Opener to Shareholders
Let's say on December 31, 1993, you invested $10,000 with a corporation run by the highest paid CEO of the time. The following year, you sold it to put your money on the new year's highest paid head runner. Now let's say you continued this process until the end of 1999. In that event, your initial $10,000 would have dwindled to a measly $3,584. If you had invested in a similar S&P500 when looked at over the same period of time, your investment would have grown to $32,300.
Major Companies Covered In Report
-Conseco (and many more)
Shareholder Resolutions Filed
Responsible Wealth has already filed documents in relation to executive compensation at seven companies: Fleet, Raytheon, Disney, Household International, Citigroup, AT&T, and Exxon Mobil. These resolutions essentially urge the company as a whole to set guidelines linking a CEO's pay to a performance improvement in important areas.