$3 billion stock option bonanza for American CEOs

According to an April 26 analysis by the Wall Street Journal, CEO stock equity among corporations listed on Standard & Poor’s 500 index has increased by over $3 billion since September 30, 2009. The report was published a month after a study by the Harris Group consulting firm showed that CEO pay increased 30 percent from 2009 to 2010, likely reaching a record high. (See: “US CEO compensation up by 30 percent”)

Following the Wall Street crash of September 2008, the Bush and Obama administrations promoted the notion that awarding a larger portion of executive compensation in the form of stock options, rather than cash salaries and bonuses, would represent a “reform” of executive pay. It would, they said, rein in the excesses of the past and tie executive compensation more directly to corporate performance.

It was also claimed that the change would give the corporate chiefs a financial incentive to expand production and hire workers.

This supposed reform was for the most part embraced by Wall Street and the corporate elite as a whole. And for good reason.

http://www.wsws.org/articles/2011/may2011/ceos-m04.shtml