WASHINGTON - Chief executives at top U.S. defense contractors have received a 200 percent pay hike since 2001 compared to a 7 percent raise for other CEOs at large companies, a study showed on Tuesday.
In its annual look at CEO compensation, the nonprofit liberal Institute for Policy Studies found the increase in executive pay at 34 publicly traded U.S. companies that are among the top defense contractors far outstripped the pay raises won by other executives or by military personnel.
The study excluded pay of such defense contractors as universities, joint ventures, privately held companies, companies headquartered outside the United States, and companies that received less than 10 percent of their revenues from defense.
"Since September 11 (2001), the ratio between median pay for defense CEOs and pay for military generals has increased to 23 to 1, up from 12 to 1 just three years earlier," the institute said in its 12th annual survey.
"There is a growing chasm between those on the battle lines and the men in the executive suites who are making millions off the defense-spending boom," the institute said.
The figures included executive pay at companies with 10 percent or more of their revenues from defense contracts.
The average pay of a CEO at a defense contractor was $11.6 million in 2004, compared to $168,509 for a military general with 20 or more years of experience and $24,278 for an army private in combat, the Institute said.
It said national defense spending rose to $406 billion in 2004 from $329 billion in 2001, with about half that amount spent each year on private contractors.
The study found average pay for U.S. chief executives overall rose to $11.8 million in 2004, about 431 times the $27,460 made by the average worker. In 2003, CEOs made about 301 times more than the average worker.
"If minimum wage had risen as fast as CEO pay since 1990, the lowest paid workers in the U.S. would be earning $23.03 an hour today, not $5.15," the Institute said in a statement.
The study's definition of compensation includes salary, bonuses, restricted stock, long-term incentive payouts and the value of stock options exercised. It does not include the estimated value of options granted but not exercised.
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