The subject of CEO income, salary and stock options for example, has become a big subject and not just on the left. John McCain has criticized hedge fund managers, for example. Why are those CEO incomes so high compared to 30 years ago ? Maybe this is the answer.
the sixfold increase in American CEO pay from 1980 to 2003 is almost wholly explained by the roughly sixfold increase in market capitalization of big U.S. companies over the same period. (Asset values have increased sixfold because both corporate earnings and the price-to-earnings ratio investors are willing to tolerate have increased by factors of 2.5.) The trend lines of market capitalization and executive payouts rose and dipped in near-perfect tandem.
That may explain it but it will always be controversial.
Tags: , economics, executive pay