Growing Wage Gap a Gnawing Problem

Payouts hit record highs despite efforts by corporate directors to put the brakes on perks such as overly generous signing bonuses and exit packages.

The Wall Streeet Journal, citing the Congressional Research Service, reports that the average pay for CEOs was more than 180 times average worker pay, up from a multiple of 90 in 1994.

Total direct compensation for CEOs was a median $8.8 million, counting salaries, bonuses and other incentives, as well as the value of restricted stock, stock options and other long-term incentive awards at the time they were granted, according to a survey by the Hay Group of 200 major U.S. companies.

"If you're a plant manager and you have a good year, you can take a vacation, but if you're a CEO with options, you can cash out in a good year and then you and your children are set for life," says Peter Cappelli, a management professor at the Wharton School. "What angers employees the most is knowing that the top boss has this plus a whole lot of other perks they won't ever have, like a plusher health-care plan and a company car and driver."

"The key relationship is the one between the CEO and top 25 managers of the company, because that's the key team," General Electric CEO Jeffrey Immelt has said in recent interviews. "Should the CEO make five times, three times or twice what this group makes? That's debatable, but 20 times is lunacy," he added.

Immelt last year received $3.3 million in base salary, $5.8 million in bonus and $396,267 in other compensation, as well as other plan-based awards valued at $4.7 million at their grant date. His compensation, he has said, was in "the two to three times the range" of GE's other 25 top executives.