USA Today reported last week that median CEO pay in 2010 rose 27%, compared to a 2.1% increase in the compensation of workers in private industry. (I’m guessing this is average compensation. The median compensation increase for typical workers would be lower.)
The highest-paid CEO was Viacom’s Philippe Dauman, who drew down a cool $84+ million, including $70 million in “stocks and options.”
The biggest Pennsylvania winners in the CEO pay rankings included L. Patrick Hassey of Allegheny Technologies, at about $15 million. Other Pennsylvania CEOs with compensation exceeding $10 million were Klaus Kleinfeld of Alcoa ($12+ million), James Rohr of PNC Financial Services Group ($11.6 million), and Lynn Laverty Esenhans of Sunoco ($11.5 million).
Since there’s been a lot of discussion about public-sector pay recently, it’s interesting to compare these CEO salaries with that of the top-earning public workers in Pennsylvania. According to a Pittsburgh Post-Gazette story in 2009, the top 100 highest-paid state employees in Pennsylvania earned $19.4 million as a group. In other words, the two highest-paid CEOs in Pennsylvania earn a lot more than the top 100 public-sector workers.
When you look at the highest-paid Pennsylvania public workers, the Governor only just made the top 100 in 2009, coming in at 97th with a salary of $174,435.
The highest-paid Pennsylvania public workers are judges and university presidents. What’s driving the salaries of the highest paid in the public sector is high salaries in the private sector that judges get compared to private-sector lawyers, and university presidents get compared to CEOs. As a result of these comparisons, the skewed salaries in the private sector pull apart salaries in the public sector. Even so, the top-earning state employees are pikers compared to top earners in the private sector.
These comparisons and the new CEO salary numbers underscore a simple point: Pennsylvania has a major problem today because of inequality in the private sector, with much of the rewards from growth going to a tiny sliver at the top. Pennsylvania does not have a problem today because the public sector still has a strong middle class, with everyone from the Governor to the school custodian and state office worker part of the broad middle class. That’s a good thing. We should be thinking about how to rebuild the middle class in the private sector, not how to destroy it in the public sector.