Ten of the top 20 financial bailout firms
have revealed the details of stock options pocketed in early 2009.
Based on rising stock prices, the top five executives at each of these
banks have enjoyed a combined increase in the value of their stock
options of nearly $90 million, according to the report, the 16th in a
series of annual “Executive Excess” reports.

“America’s executive pay bubble remains un-popped,” says Sarah
Anderson, lead author on the Institute study. “And these outrageous
rewards give executives an incentive to behave outrageously, putting
the rest of us at risk.”

Key Findings

The Bounty for Bailout Barons: From 2006 through
2008, the top five executives at the 20 banks that have accepted the
most federal bailout dollars since the meltdown averaged $32 million
each in personal compensation. One hundred average U.S. workers would
have to labor over 1,000 years to make as much as these 100 executives
made in three.

Layoff Leaders: Since January 1, 2008, the top 20
financial industry recipients of bailout aid have together laid off
more than 160,000 employees. In 2008, the 20 CEOs at these firms each
averaged $13.8 million, for a collective total of over a
quarter-billion dollars in compensation.

Wall Street Pay Dwarfs Regulator Pay: These 20 CEOs
averaged 85 times more pay than the regulators who direct the
Securities and Exchange Commission and the Federal Deposit Insurance
Corporation. These two agencies, many analysts agree, have largely
lacked the experienced and committed staff they need to protect average
Americans from financial industry recklessness.

“The lure of lucrative private sector jobs doesn’t just siphon off
talent from public service,” says Sam Pizzigati, an IPS Associate
Fellow and report co-author. “It also breeds corrosive and ever-present
conflicts of interest: Why ‘get tough,’ as a regulator, on a firm that
could be your future employer?”

Federal Response Falls Short: An eight-page table
at the end of America’s Bailout Barons tracks the fitful progress in
Washington on various executive pay reforms. Several of these have
strong potential to deflate the executive pay bubble.

The federal government, for instance, could give tax breaks and
federal contracting preferences to companies that maintain a reasonable
pay gap between their top executives and workers. Rep. Jan Schakowsky
(D-Ill.), in her proposed Patriot Corporations Act (H.R. 1874), would
extend these tax breaks and procurement bidding preferences only to
those companies that compensate their executive at no more than 100
times the income of their lowest-paid workers.

A generation ago, typical big-time corporate CEOs seldom made more
than 30 or 40 times what their workers took home. In 2008, the IPS
report shows, top executives averaged 319 times more than average U.S.
worker pay.

The bulk of the debate over executive pay reform has revolved around
questions of corporate governance, such as the independence of
compensation committees and the role of shareholders.

“Governance problems do need to be resolved,” notes IPS Director
John Cavanagh. “But unless we also address more fundamental questions –
about the overall size of executive pay, about the gap between the
rewards that executives and workers are receiving – the executive pay
bubble will most likely continue to inflate.”

“Public officials in Congress and the White House hold the pin that
could pop the executive pay bubble,” says IPS Senior Scholar Chuck
Collins. “They have so far failed to use it.”