The Central Pennsylvania Business Journal this week published the list of the highest-paid 10 executives in the region in 2010. Nine of these executives are men. The tenth was Mary F. Sammons, the former Chairman and CEO of Rite Aid.
Some of the salary information in The Business Journal is not new. (See, for example, the CEO pay list in Table A1, starting on page 21 of The State of Working Pennsylvania 2011.) What is new is that The Business Journal also published these executives’ pay in 2009, allowing us to look at the change in pay from 2009 to 2010 for a group of Pennsylvania executives. (Earlier, we only had information on change in executive pay from 2009 to 2010 for U.S. CEOs.)
Here’s what we found. The dollar increase in pay for these executives ranged from $2.55 million for Michael Lockhart of Armstrong World Industries to less than a million dollars (about $900,000) for Neil Shah, the President and COO of Hersha Hospitality Trust. The average increase was $1.64 million.
The percent increase in pay ranged from a mere 14% for Peter Carlino, Chairman and CEO of Penn National Gaming Incorporated, to nearly 100% for John Standley, the current President and CEO of Rite Aid.
With the increases received in 2010, the highest-paid Central Pennsylvania executive was Mr. Lockhart at $11.7 million. In second place at $10.5 million was David J. West, the former President and CEO of the Hershey Company, now at Del Monte. As we pointed out in The State of Working Pennsylvania, Mr. West’s salary amounted to 55% more than the combined salaries of 400 foreign exchange students earning $8.15 per hour, if they work full-time, full-year. Shaving pennies from workers to add millions to executive pay, that’s the ticket.
The average increase in executive pay for this top 10 list was a cool 38%. This 38% increase compares to a 2010 increase in hourly wages for the lowest-paid 90% of Pennsylvania workers that ranged from zero to 4% (unadjusted for inflation since The Business Journal didn’t adjust for inflation when looking at executive pay).
The evidence is overwhelming that the levels of inequality that the United States has now reached have large negative social and economic impacts. (For additional evidence, check out this TED video by Richard Wilkinson.) Yet after a very brief pause after the stock market crash of 2008-09, inequality has started merrily growing again, and executives are riding the gravy train as enthusiastically as ever.
We think that this is shameful and it’s got to stop.