Payment Disparity Between The Ceo And The Ordinary Employee: An American Story

America's top CEOs are getting pay hikes 5 times as fast as the lowly John Qs, even while the economy is sliding down to a point where the US economy is not the best among equals anymore.

While the average CEO earned $10.9 million last year,the average wage of a full-time US worker reached $52,916 in 2008. In 1988, a CEO earned $1.78 million on an average, while a wage earner earned $25,076.

"There is indeed a problem with executive compensation at publicly traded US companies," said Don Delves, the head of a Chicago-based executive compensation research firm.

Analysts have tied the steep increases in CEO pay to a number of factors. These include the expanded use of stock options, the re-pricing of stock options when shares of the company declined and incentive pay packages. One important factor is peer review - a lot of executives pump each other when they sit on board of compensation committees of peer companies.

Here are some CEOs whose pay raises produced raised eyebrows after the recession set in with cost cuts and lay offs:

* Bob Iger, the CEO of Walt Disney Co. (NYSE: DIS), had an 85 percent raise in 2008 over 2007, to $51.1 million, while he laid off 1,900 employees and saw shares in the company fall by 64.3 percent.

* Andrea Jung, CEO of Avon Products (NYSE: AVP), saw the company's shares fall by 14.3 percent since the beginning of 2008 and cut the payroll by 3,000 but still managed to win a 75 percent rise in compensation.