Chief executives win the pay lottery

THE PHRASE “happy as Larry” was coined to describe an Australian boxer who won a bumper prize in the 1890s. But it might have been designed for Larry Culp, the new chief executive of General Electric, who has been awarded a contract that could pay out $237m.

Mr Culp is a member of a lucrative club. In 2017 a chief executive at one of America’s 350 largest firms earned on average $18.9m, according to a study by the Economic Policy Institute, a left-of-centre think-tank in Washington, DC. That is 312 times as much as the average worker, a ratio that is close to its peak in 2000, of 344. The thread connecting those two dates is the soaring value of share options. The stockmarket was at the end of a long boom in 2000 and surged again last year, prompting many bosses to cash in their shares.

Back in 1980, before the enthusiasm for awarding share options to executives took off, the ratio between chief-executive and...

via Business Feeds

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