A million here, a million there, and soon you’re talking real money.

Despite the financial crisis, rising unemployment and falling
profits, senior executives at Georgia’s largest companies saw their
median pay rise 3 percent last year to nearly $2 million, according to
an analysis by AJC reporter Joe Guy Collier. For CEOs alone, median
compensation was $5.5 million.

Capitalism is supposed to be the system that prides itself on accountability.

Capitalism is supposed to be the system that rewards execs who do right by shareholders.

In tough times like these, many readers — and shareholders — have become angrier about how out of whack our system has become.

One small example. About two weeks ago, dozens of people commented
on a Biz Beat blog reporting that the Chrysler CEO at the time, Bob
Nardelli, said former Chrysler chief Lee Iacocca stood to lose much of
his pension and his company car due to the automaker’s bankruptcy.

Nardelli, you’ll remember, left Home Depot’s top job with a
severance package in the $200 million neighborhood — despite
considerable criticism of his performance.

Blog comments included: “Nowadays, corporations mostly have greedy
short-timers at the helm.” After five paragraphs, the writer felt
better: “Thank you for the space to rant.”

Executive compensation has that effect on people.

But don’t bet on a lot of change. There’s going to be some, but let’s try to assess how much.

In Washington, there’s been a lot of talk about reforms. There’ll be
a pay czar for seven companies that received federal bailout money.
Just seven.

For other public companies, shareholders are likely to gain a
non-binding vote over executive pay issues. Another reform would
increase the independence of the board of directors’ panel that decides
on executive pay.

Those measures, if adopted, will likely restrain executive pay only
around the edges. That’s enough, many argue, because going further
would reduce the supply of talented people.

But some of those talented people created the financial mess we’re
in. And America, land of the best higher-education system in the world,
has plenty of talent — many on the unemployment line right now.

Locally, Collier’s analysis in Sunday’s paper found that some
restraint already had occurred in Georgia. About a third of the
executives studied did not receive performance-based, short-term
bonuses last year — nearly three times as many as missed such payments
in 2007.

But that means two-thirds of the senior executives still received
such bonus payments last year. And once the recession ebbs and
corporate profits rebound, more will reap millions.

Companies are likely to follow SunTrust, which issued a new set of
stock options for its CEO this year to reflect the dramatic fall in its
share price. Already, the new options have appreciated considerably in
value.

More needs to be done to right this issue.

In 1990, the average CEO earned about 107 times the average worker,
according to a study by United For a Fair Economy. By the middle of
this decade, average CEO pay was more than 400 times the average
worker’s.

Capitalism is supposed to work for all stakeholders.

http://blogs.ajc.com/business-beat/2009/06/16/big-change-in-exec-pay-is-unlikely/?cxntfid=blogs_business_beat