Bush takes aim at executive salaries

“Overall, we’re seeing some very good growth data, combined with some friendly inflation data, which overall supports the view of a steady Federal Reserve,” said Alex Beuzelin, senior market analyst at Ruesch International, in Washington, D.C.

On the inflation front, the closely watched personal consumption expenditures price index fell 0.8 percent in the quarter, mostly because of falling energy prices. It was the biggest decline since the third quarter of 1954 when it dropped 1.2 percent and surprised economists, who were expecting gain of 1.9 percent.

Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, has said he will push legislation to require shareholder approval of executive compensation plans. And a separate bill before the Senate to raise the minimum wage would fund accompanying tax breaks to ease the burden on small businesses by capping executives’ tax-deferred pay packages at $1 million a year.

Still, even Bush’s words on pay were met with complete silence from the business crowd he addressed.

Huge salaries and other perks for CEO have drawn investor ire and made splashy headlines. Anger over executive compensation unrelated to performance, even as companies stumble, lay off employees or renege on billions of dollars in pension obligations for workers’ retirement, has spread from shareholders to union activists and buttoned-down mutual fund trustees. The chasm between executives’ salaries and the pay of rank-and-file employees continues to widen.

Home Depot chief executive Bob Nardelli was earning an average of $25.7 million a year — excluding stock options — before he was forced out in a furor over his hefty pay. He left with a severance package worth about $210 million.

In 2001, General Electric Co. paid chief executive Jack Welch $16.25 million. Welch was replaced that year with Jeffrey Immelt, who earned $3.4 million in total annual compensation in 2005.

The New York Stock Exchange faced an uproar over former CEO Richard Grasso’s $187.5 million severance package. Former New York Attorney General Eliot Spitzer, now governor, sued members of the NYSE board over the package given to Grasso when he quit as chairman in 2003.

The annual salary of the president is $400,000.

“The state of our economy is strong,” he declared.

Democrats respond that Bush is giving a misleadingly rosy picture about the economy.

“President Bush can deliver all the economic pep talks he wants, but the fact remains that his failed leadership has led to the worst job recovery on record, stagnating household incomes, a rise in poverty and record deficits,” said Stacie Paxton, spokeswoman for the Democratic National Committee.

Since Bush took office in 2001, the country has seen one in five manufacturing jobs disappear, a total of 2.96 million lost jobs. The U.S. trade deficit is expected to climb to a fifth consecutive record when final 2006 figures are totaled next month.

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