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ANALYSIS

Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
 
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
 
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
 
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
 
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Big pay gap in Dow 30

By Matthew Scott

Think executive pay is out of control? Here’s some fresh insight into just how much: Increases in CEO pay at the 30 companies in the Dow Jones industrial average have topped financial performance gains over the last 10 years.

Between 1997 and 2006, the chief execs saw an average annual increase of 15.1% in total comp, according to new research from compensation consulting firm DolmatConnell & Partners. Meanwhile, the companies’ shareholder return and net income averaged increases of 12.1% and 14.4%, respectively.

So while the execs’ paychecks swelled by 308% over the 10-year period, the average stock price gained just 213% and earnings grew only 284%. The growth in pay primarily came from short-term incentives, which increased 18.2% a year, or 432% in total. Base salaries saw hikes averaging 9.6% a year, a 150% cumulative gain.

Write to the editors at fw_editor@financialweek.com.
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