Posted by Sadie from ? (220.127.116.11) on Tuesday, April 29, 2003 at 11:32AM :
FOR IMMEDIATE RELEASE
APRIL 28, 2003
CONTACT: United for a Fair Economy
CEOs at Defense Contractors Earn 45 Percent More, Study Finds; Campaign Contributions Tied to Bigger Contracts
BOSTON - April 28 - Median CEO pay at the 37 largest defense contractors rose 79 percent from 2001 to 2002, while overall CEO pay climbed only 6 percent, according to a new report from United for a Fair Economy, "More Bucks for the Bang: CEO Pay at Top Defense Contractors," by Chris Hartman and David Martin.
Median pay was 45 percent higher in 2002 at defense contractors than at the 365 large companies surveyed by Business Week magazine. The typical U.S. CEO made $3.7 million in 2002, while the typical defense industry CEO got $5.4 million.
The jump in median defense contractor CEO pay far exceeded the increase in defense spending, which rose 14 percent from 2001 to 2002.
Compared with an army private's pay of $19,585, the average CEO at a major defense contractor made 577 times as much in 2002, or $11,297,548. This is also more than 28 times as much as the Commander in Chief's salary of $400,000.
The study also looked at the size of campaign contributions by the largest defense contractors and found a strong correlation between campaign contributions made by a company in the 2000 and 2002 election cycles and the value of defense contracts awarded to that company. Ninety percent of the difference in contract size can be accounted for by size of contributions. For example, top weapons contractor Lockheed Martin was also the top campaign contributor among defense firms.
The 37 companies included in the CEO pay study were all the publicly-traded corporations with at least $1 billion in total defense contracts from 2000 through 2002. The list includes well-known defense contractors like Lockheed Martin, Boeing, Raytheon, Northrop Grumman, and General Dynamics, as well as some companies not usually associated with military spending, such as FedEx and Dell Computer. Compensation was defined as salary, bonus, "other compensation," restricted stock awards, long-term incentive payouts, and the value realized from the exercise of stock options.
United for a Fair Economy is a national, independent non-profit that spotlights growing economic inequality and advocates shared prosperity. The report is on the web at http://www.FairEconomy.org. Hard copies are available upon request.
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