Feeling a little queasy every time you fill up at the pump because of those high prices? Well you are not alone. Seven out of every ten Americans are now experiencing a real fiscal hit from higher fuel prices at the pump.
However, while ordinary Americans are forking over $3 for a gallon of gas, 15 distinctly unordinary Americans—the CEOs of the largest U.S. oil industry companies—are celebrating their biggest paychecks on record, according to a new report. These CEOs last year took home an average $32.7 million in compensation—518 times more than average oil industry workers in 2005.
Due to high oil prices, U.S. consumers are expected to pay an additional $200 billion this year for oil and gas products. These billions, notes Senator Byron Dorgan, amount to a “massive transfer of wealth from average Americans who can’t afford it, to big oil companies who already were experiencing all-time record profits.”
Here are some statistics to make you sick: The top 15 U.S. Oil Barons are paid 281 percent of the average CEO compensation in comparably sized businesses. These top 15 Petroleum Profiteers got an average raise of 50.2 percent of their 2004 pay packages. Meanwhile, the annualized average hourly wage of production workers in the oil and gas industry increased by only 4.1 percent from their 2004 levels.
The Top three highest paid U.S. oil chieftains in 2005:
- 1 William Greehey (Valero Energy) = $95.2 million
- 2 Ray R. Irani (Occidential Petroleum) = $84.0 million
- 3 Lee Raymond (outgoing CEO of ExxonMobil) = $69.7 million
And the lowest paid: Chad Deaton, CEO of Baker Hughes = $6.6 million
It would take a construction laborers working in the oil industry 4,279 years to earn what CEO William Greehey of Valero Energy earns in a year.
The report outlines some policy initiatives that would help rectify this crazy situtaiton:
- Rebate Oil Windfall Profits
Oil industry windfall profits currently end up lining the pockets of top oil executives. They could instead be earmarked for public energy conservation projects and efforts to reduce energy costs for the poor. A number of lawmakers in Congress have already made such proposals. Senator
Byron Dorgan (D-ND) has proposed that a 50 percent tax be applied to profits earned by major U.S. oil companies on the sale of crude oil above $40 per barrel.
- Eliminate Taxpayer Subsidies for the Oil Industry
The oil industry, a most “mature” industry, doesn’t need government tax breaks and subsidies. But that doesn’t stop oil lobbyists from pressing Congress to channel Big Oil billions of dollars in subsidies and tax breaks each year. This “corporate welfare” encompasses both massive tax breaks and the use of public lands to extract oil at below-market prices.
- Institute Rigorous Anti-Trust Measures in the Oil and Gas Industry
There has been tremendous concentration in the oil industry, with over 23 major mergers in the last decade. Not since the 1911 antitrust break-up of John D. Rockefeller’s Standard Oil Company has the country witnessed such a concentration of petroleum power.
“It is time the Congress took a very serious look at modifying the anti-trust laws,” said Senator Arlen Specter (R-PA), who convened a Judiciary Committee hearing on the consolidation of the oil industry in February 2006.
- Separate Oil and State
Oil Change International’s own campaign features. As the report notes: “At a more basic level, no meaningful progress will be made on the initiatives described above until we separate “oil and state.”
- Make CEO Option Pay Accurately Reflect True “Performance”
Stock option rewards for top oil company executives should reflect responsible performance, including performance on mitigating climate change, not just oil barrel price increases completely unrelated to an executive’s own performance.
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