Offshoring helps the economy... if you're a CEO who offshores.

[Dave Farber <dave () farber net>]

___

Dave Farber  +1 412 726 9889



...... Forwarded Message .......
From: "Kevin G. Barkes" <kgb () kgb com>
To: "dave () farber net" <dave () farber net>
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

-----
Kevin G. Barkes
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