Michigan's top-paid corporate executives are raking in nearly double what they made in 2001 at a time when deep economic turmoil has cost tens of thousands of workers their jobs.
The average compensation of the Fortunate 50 -- The Detroit News' ranking of the most highly paid executives at Michigan's publicly traded companies -- was $7.1 million in 2006, up 88 percent over 2001 or more than seven times the rate of inflation.
No. 1 on the list is Alan Mulally, who was hired away from Boeing Co. last fall by Ford Motor Co. as its new president and CEO. His compensation package -- for four months on the job in 2006 -- was worth $28.2 million, according to Ford's proxy statement filed with the Securities and Exchange Commission.
Richard A. Manoogian, chairman and CEO of Taylor-based Masco Corp., placed second with total compensation of $17.3 million.
Corporations are required by law to make public the pay of their most highly rewarded executives via an annual filing with the SEC. Amounts posted include base salary, cash bonuses, stock awards and miscellaneous pay and perks.
The average weekly compensation of a Michigan Fortunate 50 member is 174 times that of what the average Michigan worker collected in 2006, $784.34 a week.
By contrast, Mulally's 2006 package worked out to $541,990 a week over a year, while Manoogian earned $332,560 weekly.
The widening pay divide is a sore spot for many workers in Michigan."I don't know what you tell workers that are laid off about executives at the company that are making millions and millions of dollars," said Pete Lupo, managing director of Pearl, Meyer & Partners, a New York City compensation consulting firm. "If you can go back and demonstrate their pay has a direct correlation to the performance of the company and is within the peer norms, that's the only answer.
"But it's difficult for many people to understand it because they can't relate to people being paid millions of dollars a year."
Executive compensation packages have swelled even as Michigan companies slashed 171,900 jobs from their payrolls over the past five years. Last year, 11 executives from seven Michigan public companies made $10 million or more, according to company filings. In 2001, one executive topped the $10 million mark.
Average 2006 compensation for the 50 people on this year's list was $7.1 million, with the No. 50 executive earning $2.7 million. In 2001, the average was $3.8 million, with the earner on the lowest rung making $1.85 million.
Other findings in 2006:
Nationally known psychologist Robert R. Butterworth said anger is building among the work force over these huge executive compensation packages.
"Workers don't like it when executives are making all this money and they are being asked for wage and benefit cuts or face layoffs," said Butterworth of Los Angeles. "People don't forget these things."
Gary Wolkowicz, a 37-year veteran at Ford's Rouge plant, says top managers are "showing their greed and not being fair."
"It's outrageous that Alan Mulally is making so much money at the same time they keep asking us to accept so many cuts," he said.
Compensation experts, however, say some positive signs are emerging from the pay packages posted this year. More bonuses and stock awards are being tied to performance goals while base salaries have climbed only 16 percent.
While Michigan's economy is suffering, many of the state's larger companies are national or even global corporations. Regardless of the local climate, companies often have to compete to hire and keep top-level executives. That means offering competitive pay and benefits.
In Mulally's case, for example, $18 million of his package was reimbursement for money he left on the table by leaving Boeing.
Andrew Goldstein, central division practice leader for Watson Wyatt Worldwide, a consulting firm with offices in Southfield, said firms in crisis sometimes have to offer huge pay packages to lure new executives.
"Sometimes a distressed company or a company going through a lot of turmoil has to pay more to attract an executive," Goldstein said. "Why would an executive leave a company to take a risky job at a struggling company?
"It's pay, pay and more pay."
Prominent local business executives not on this year's Fortunate 50 include: