Has Executive Pay Gotten Out of Control?

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The CEO of AOL Time Warner raked in $77.3 million in total compensation during 2001. The CEO of Wal-Mart made $17.1 million. The CEO of Coca-Cola? A whopping $105 million.

While many American workers struggle to hold down two jobs in order to pay their bills, the salaries of corporate executives continue have been growing astronomically. And even as thousands of workers have been laid off during the recent economic slowdown, executive salaries continue to soar.

Some economists argue that top corporate executives create so much wealth that their salaries are justified. To others, the chasm between the salaries of executives and those of workers is an egregious injustice.

In addition, much of corporate executive compensation comes in the form of stock options, which only have value if the company's stock price rises. This provides incentive to corporate leaders to find ways to artificially boost their stock prices, through means like the accounting tricks that ultimately brought down Enron.

This hour, a look at corporate executive pay. How much is too much? And is the use of stock options skewing the priorities of America's corporations?


David Leonhardt, reporter with The New York Times, written the special report on executive pay for the Times for the past 3 years

Kevin Murphy, professor of finance and business economics at the University of Southern California

This program aired on April 11, 2002.


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