Not only that, two of the 50 highest paid saw an over 400 percent increase in compensation. Not exactly chump change when you look at the numbers and take into consideration that the average workers in their companies have seen pay go up by only 5 percent between 1979 and 2012. Even highly compensated professionals who rank in the top one tenth of salary earners in the nation don't touch what the top 50 CEOs rake in. To put things a little more into perspective, according to a study released by the Economic Policy Institute, the CEO-to-worker compensation ratio was 29-to-1 in 1978. In 2012 that ratio had jumped to a staggering 272.9-to-1.
So why do some CEOs get paid such outrageous sums to be the top employees in a company? To put it plainly, the job ain't easy. CEOs are expected to provide a level of talent that is akin to what a star athlete is required to deliver to a professional sports team. The skill set is extreme and the number of people who fit the bill is limited.
Only about 20 percent of their pay is made up of salary. The rest is made up of incentives such as regular bonuses, restricted stock awards and executive retirement plans, to name just a few. In theory, all of this is, of course, based on the health of the company. If it's doing well, the chief executive gets the credit and the cash. But some see the mind boggling rewards reaped by some CEOs lately as excessive, and not without reason.
Case-in-point, John Thain. The man raised disproportionate decadence to a whole new level when he took the helm at Merrill Lynch in late 2007. He immediately began a remodel of his office. The bill came in at a staggering $1.2 million. He resigned a little over a year later, but not before racking up millions more in expenses on top of a reported $78 million in compensation for 2007, and he garnered that package having been with the company only a month out of that year. Not bad, but his extreme spending did lead to his demise as CEO. Bank of America bought Merrill Lynch and Thain was deemed not to be an asset. Go figure.
So who are a few of the top paid CEOs? Larry Ellison of Oracle tops the list having pulled in $76.9 million in direct compensation in 2013. Leslie Moonves of CBS garnered $65.4 million. Michael Fries of Liberty Global received $45.5 million. These three CEOs made more than the combined pay of the 50 CEOs at the bottom of the list of the top 100. Interestingly, not one of the companies who had the highest paid top execs ranked in the top 10 percent performance-wise in the country.