CEOs at Defense Contractors Earn 45 Percent More, Study Finds

FOR IMMEDIATE RELEASE

CONTACT: United for a Fair Economy
Betsy Leondar-Wright of United for a Fair Economy, 617-423-2148 ext. 13

http://www.FairEconomy.org/press/2003/MoreBucksForBang_pr.html

BOSTON - April 28 -- Median CEO pay at the 37 largest defense contractors
rose 79 percent from 2001 to 2002, while overall CEO pay climbed only 6
percent, according to a new report from United for a Fair Economy, "More
Bucks for the Bang: CEO Pay at Top Defense Contractors," by Chris Hartman
and David Martin.

Median pay was 45 percent higher in 2002 at defense contractors than at the
365 large companies surveyed by Business Week magazine. The typical U.S.
CEO made $3.7 million in 2002, while the typical defense industry CEO got
$5.4 million.

The jump in median defense contractor CEO pay far exceeded the increase in
defense spending, which rose 14 percent from 2001 to 2002.

Compared with an army private's pay of $19,585, the average CEO at a major
defense contractor made 577 times as much in 2002, or $11,297,548. This is
also more than 28 times as much as the Commander in Chief's salary of
$400,000.

The study also looked at the size of campaign contributions by the largest
defense contractors and found a strong correlation between campaign
contributions made by a company in the 2000 and 2002 election cycles and
the value of defense contracts awarded to that company. Ninety percent of
the difference in contract size can be accounted for by size of contributions.
For example, top weapons contractor Lockheed Martin was also the top campaign
contributor among defense firms.

The 37 companies included in the CEO pay study were all the publicly-traded
corporations with at least $1 billion in total defense contracts from 2000
through 2002. The list includes well-known defense contractors like Lockheed
Martin, Boeing, Raytheon, Northrop Grumman, and General Dynamics, as well
as some companies not usually associated with military spending, such as
FedEx and Dell Computer. Compensation was defined as salary, bonus,
"other compensation," restricted stock awards, long-term incentive payouts,
and the value realized from the exercise of stock options.

United for a Fair Economy is a national, independent non-profit that
spotlights growing economic inequality and advocates shared prosperity. The report is
on the web at http://www.FairEconomy.org. Hard copies are available upon
request.

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