Executives cash in on war and oil bonanza

Top oil and defense industry executives in the United States are raking in record personal profits on the backs of the US wars following the terror attacks of Sept. 11 and sky-high oil prices, two think-tanks said on Aug. 30. "CEOs [chief executive officers] in the defense and oil industries have been able to translate war and rising oil prices into personal jackpots," says the new report "Executive Excess 2006," a 60-page study by the Institute for Policy Studies in Washington and the Boston-based United for a Fair Economy. The report's authors say US taxpayers are funding much of this bonanza and faulted political and congressional leaders for not exercising better and more thorough oversight. "Americans across the political spectrum should be outraged by the sight of executives cashing in on war windfalls," says report co-author Sarah Anderson. "Unfortunately, partisan politics has stopped Congress from effectively overseeing this war contracting free-for-all." The study surveys all publicly held US corporations among the top 100 defense contractors that had at least 10 percent of revenues in defense. It found that the top 34 CEOs combined have earned almost a billion dollars since the 9/11 attacks on the United States. This would have been enough money to employ and support more than a million Iraqis for a year to rebuild their country. The defense executives' average compensation jumped from $3.6 million during the pre-9/11 period of 1998-2001 to $7.2 million during the post-9/11 period of 2002-2005. Among other startling facts revealed in the report is that in 2005 alone, defense industry CEOs garnered 44 times more pay than military generals with 20 years experience, and 308 times more than Army privates. The report names United Technologies average $32.7 million, compared with $11.6 million for all CEOs of large US firms, the report finds. The top three highest-paid US oil chiefs in 2005 were William Greehey of Valero Energy at $95.2 million, followed by Ray R. Irani of Occidental Petroleum at $84 million and Lee Raymond, the outgoing CEO of ExxonMobil, at $69.7 million. The lowest paid was Chad Deaton, CEO of Baker Hughes, at $6.6 million. "The average construction worker at an energy company would have to work 4,279 years to equal what Greehey collected last year," the report noted. Executive pay at US-based oil companies also far outpaced pay at oil companies based outside the United States, says the report. International oil giants BP and Royal Dutch Shell, the second and the third largest internationally, paid their top executives only one-eighth what their US counterparts received–$5.6 and 4.1 million in 2005, respectively. Both companies operate in the same global marketplace as their US-based competitors. Since 1990, the overall CEO-worker pay gap in the United States has grown from 107-to-1 to last year's 411-to-1, the report said.