[IP] Offshoring helps the economy... if you're a CEO who offshores.
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Dave Farber +1 412 726 9889
...... Forwarded Message .......
From: "Kevin G. Barkes" <kgb@xxxxxxx>
To: "dave@xxxxxxxxxx" <dave@xxxxxxxxxx>
Date: Tue, 31 Aug 2004 18:16:51 -0500
Subj: Offshoring helps the economy... if you're a CEO who offshores.
http://tinyurl.com/3uhvj
Chief executive officers at the companies shipping the most U.S. jobs
overseas seem to be pocketing some of the savings, according to a new
report.
The study, published by two groups concerned with economic inequality,
found that average CEO compensation at the 50 firms outsourcing the most
service jobs abroad increased by 46 percent in 2003. CEOs at the 365 large
companies surveyed by Business Week only saw an average raise of 9 percent,
according to the report from the Institute for Policy Studies and United
for a Fair Economy.
CEOs at top offshore outsourcers earned an average of $10.4 million in
2003, while average CEO compensation hit $8.1 million, according to the
report. From 2001 to 2003, the top 50 outsourcing CEOs earned $2.2 billion
while sending an estimated 200,000 jobs overseas, the report said.
"These 50 CEOs seem to be personally benefiting from a trend that has
already cost hundreds of thousands of U.S. jobs and is projected to cost
millions more over the next decade," the report said.
Offshore outsourcing, farming out tasks to lower-wage nations, has become a
hot-button issue over the past year or so. Defenders of the
practice--including President Bush's top economic advisor--say it
ultimately assists the U.S. economy. But critics say it costs U.S. workers
jobs and threatens the country's long-term tech leadership. The exact scale
of the trend remains unclear.
The new report names a number of technology companies in its list of
leading offshore outsourcers. IBM is among them. Big Blue has plans to
shift about 2,000 U.S. jobs abroad this year, but it also is hiring
thousands of employees in the United States. According to Tuesday's report,
IBM CEO Sam Palmisano's pay reached $7.7 million in 2003, up 13 percent
from 2002.
The report lists a more dramatic increase in pay for Stephen Bennett, CEO
of Intuit, which makes personal-finance software. Bennett got a 425 percent
pay increase in 2003 to $22.3 million while sending call center jobs to
India, the study says.
Neither IBM nor Intuit immediately returned requests for comment.
The study also said the so-called CEO-to-worker wage gap is rising again,
after two years of narrowing. The ratio of CEO pay to worker pay reached
301:1 in 2003, up from 282:1 in 2002. If the minimum wage had increased as
quickly as CEO pay since 1990, it would be $15.76 per hour, rather than the
current $5.15 per hour, according to the study.
Regards,
KGB
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Kevin G. Barkes
Email: kgb@xxxxxxx | Web: www.kgb.com
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