Big bonuses are back at some companies.
Bonus pay at 50 major corporations gained 30.6 percent last year, a jump of $43 million, the Wall Street Journal reports, the biggest in three years.
After bonuses fell briefly out of favor at large companies during the down turn, execs at companies including Starbucks, Clorox, General Electric and Walt Disney earned significantly larger payouts last year, according to a survey of 50 companies for the WSJ by consulting firm Hay Group.
Before the recession, massive bonuses were a hallmark of successful companies, but as profits plunged during the downturn, so did pay. American consumer spending has started to recover, boosting sales, and companies are holding on to a total of $1.9 trillion in cash and liquid assets. These factors helped strengthen results for many of the companies now boosting bonuses.
On Wall Street, many banks reined in cash bonuses after the financial crisis and boosted stock awards for top employees. Yesterday, the New York Times reported that a new round of higher dividend payments at banks would mean a boon for executives receiving large stock awards.
The CEOs examined by the WSJ earned a total of $126.1 million in bonuses in 2010, up from around $83 million in 2009.
After skipping bonus pay for two years while General Electric profits were low, CEO Jeffrey Immelt got a $4 million cash bonus in 2010.
Starbucks chief executive Howard Schultz got his biggest bonus ever, $3.5 million, topping his previous record of $1 million. The coffee chain was hit hard by the economic downturn, and forced to close branches. Schultz had left the chain, but returned in 2008 to help turn it around.
Clorox CEO Donald Knauss got a bonus of just under $2 million, up over 50 percent from the year before, while Clorox revenue fell by 3 percent.
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