US: CEOs with Defense Firms Double Salaries Since 9/11
The chief executives of the defense industry's largest companies have doubled their paychecks since 9/11 and the War on Terrorism began -- far greater than the average 7 percent growth for all corporate CEOs.
WASHINGTON -- The chief executives of the defense industry's largest
companies are taking home paychecks that have more than doubled in the
past four years -- far greater than the average 7 percent growth for
all corporate CEOs, according to an independent study based on
documents from the Securities and Exchange Commission.
Among the top three dozen publicly traded companies that do business
with the Pentagon, pay for top corporate executives has skyrocketed
since 2001, rising by an average of 200 percent compared with all
top-tier chief executives at large, according to the annual study to be
released today.
In one example, compensation for William H. Swanson, chief executive of
in Waltham, more than doubled to $5.3 million over his predecessor Dan
Burnham's salary in 2001, according to the study by the Institute for
Policy Studies, a liberal Washington think tank. After helping rescue
the struggling company a few years ago, Ronald N. Tutor, CEO of
a construction management firm in Framingham with reconstruction
contracts in Iraq and Afghanistan, took home $14.3 million, the study
found.
Conservative and libertarian groups say CEO pay increases are simply a reflection of rising corporate profits.
''As a company's fortunes fare, so do the CEOs and other top
managers and that is the way it should work in the business world,"
said Charles Pena, director of defense policy studies at the
libertarian Cato Institute in Washington. Pena acknowledged that
because 'the vast majority of money these people make comes from
taxpayer dollars," there are 'issues that need to be examined."
Keith Ashdown, president of the conservative Taxpayers for Common
Sense in Washington, said seven- and eight-figure salaries draw
attention, ''but it is only a small snapshot of what is going on."
Defense companies are doing well, but ''is this war profiteering?"
Ashdown asked. ''You have to look at it on a case-by-case basis."
Many factors come into play when calculating CEO pay -- bonus
packages, a company's stock value, and its overall performance,
including private contracts and government business. Nevertheless,
defense companies always do better during wartime, and the study
provides a glimpse into how Pentagon contractors have fared in the
years since Sept. 11, 2001, and the invasion of Iraq.
''While it may not be fair to say they don't deserve to make what
they are making, it is correct to question why they are making so much
money," Pena said. ''Their profitability is tied to government policy
decisions."
The Institute for Policy Studies, which opposes US military
involvement in Iraq, produced the study with United for a Fair Economy,
a liberal group based in Boston; this is the 12th year the two
organizations have teamed to document corporate executives'
compensation.
For the first time, the study included an analysis of the top 34
corporations whose work for the Pentagon amounted to at least 10
percent of their business.
Others highlighted in the study were
CEO George David, who earned $88 million in 2004, almost four times
more than the $23 million he made in 2001. J. P. London, CEO of CACI,
whose employees have served as interrogators in Iraq, saw his pay jump
170 percent to $3 million in 2004. Ronald Sugar, CEO of
Sarah Anderson, one of the report's coauthors, said she believes the
data are evidence of war profiteering and she is calling for greater
congressional oversight on defense contracts, particularly those
related to the war in Iraq and the US mission in Afghanistan.
A Raytheon spokesman declined to comment directly on the study and Perini executives did not return several calls.
''No matter what your position on the war, we should all be
concerned about war profiteering," said Anderson, director of the
economy program at Institute for Policy Studies. ''It's just not
getting the attention it deserves nowadays."
- 174 War & Disaster Profiteers Campaign