Evening star., 1939-02-12
Executives Reap
Richest Profits,
Report Says:
10th Century Fund
Finds Huge Share
Goes to Few
By JOHN LEAR,

NEW YORK, FeD. ll.-lne TlCn"
est profits of American business go
to the few men who boss it-not to
the thousands who own it or to the
millions who keep it running-the
Twentieth Century Fund reported
today to the Presidents committee
investigating monopoly.
With salaries "as much as 1000
day." this comparative handful
of executives "on the whole, in good
times and bad, = fare better than
the wage earners or investors" the
fund said in summarizing its find
ingS in a four-year study OF big and
little business.
The report was requested by
United States Senator Joseph c.
O'Mahoney. Democrat, of Wyoming
chairman of the Monopoly Com
mittee. 1t was based on data OBJ
tanned from Treasury Department
records and the books of business
itself. Some of the figures covered
all of business; others were scientific
"samplings" from hundreds of rep
resentative corporations of all kinds
and sizes throughout the country.
Although stockholders are far
more numerous than the "corpor-
ate officers covered by the study,
the income of the latter was almost
half as great t42.2 per cent? as
total dividend payments in the year
1881.
Proportion Increases.
GAS the depression deepened." the
report continued, the proportion
(between executive salaries and
stockholders income) rose to 535
per cent in 1882 and to 624 per
cent in 1888"
Even in this latter year. at the
depth of the depression. the study
showed executive salaries totaled
about $4,000 900 ,0OO-"more than all
the rent paid by corporations and
five times the corporate income
tax
A still bigger slice of the profits
for the big boss" was indicated by
the report, for:
These figures (the s2,000000,-
000) do not include dividends on
stock owned by officers. the total
of which is unknown; nor do they
include the profits which officers
of companies may have made
through speculation in the stock Of
their own corporations"
The more pay the executive gets
in comparison to dividends, the less
successful the business is, as . gen.
eral rule. it was pointed out:
Big Salaries Continued.
whereas the corporations show.
ing a profit in 1882 paid their on
GERS aggregate salaries amounting
to 23.8 per cent and to 359 per cent
in 1888; the improbable ones. even
in 1881, were paying their officers
almost two-thirds as much as they
paid their common stock investors
I'm 1882 officers compensation
and dividends of the improbable
/ corpora tions were about equal in
amount, while in 1888 the officers OF
these corporations received almost
one and half times as much -
dS llle lllVeSlUIS ulu.
In bad times total salary pay
ments to officers are 'stickier' than
wages and dividends They go down
more slowly and less far. In good
times they 60 up faster and farther.
Chief officers of leading corpora
tions took more severe cuts in pay
than the average reductions in wage
rates. Wage earners and other en-
ployes, on the other hand. suffered
larger reduction in total income
because of the severe unemploy-
ment at the depth of the depres-
sion"
Opinions Avoided.
The business study, made by sci
entiflc "sampling" of representative
corporations of all sizes, neither
condoned nor condemned the high
salaries. 1t merely noted them, in
keeping with the Twentieth Cen
tury Funds tradition of unbiased
fact finding in economic problems
1t did say, however, that it consid-
cred some increase in the ratio be-
tween executive salaries and wage
dividend totals ito be expectd" in
bad times because key" officials are
essential to industrial operation
whether production is high or low.
The report did not enumerate the
executives who are paid "as much
as 81 900 a day." only noting that
hgure as "a maximum" OF $40
corporations analyzed, however. Il
per cent" paid their first officers"
salaries of 100000 a year or over"
Somewhat over a third" of the ex-
ecutives got between $25,OOO and
$4,000 a year: nearly third"
got less than $4,000 and some got
as little as $4,000 a year.
Bankers proved to be less highly
paid than is commonly imagined.
The top men in financial corpora
tons received between SIS 900 and
$40 900 in 1884 and 1885. They ranged
with textile executives as the only
industrial leaders getting less than
100000 a year. In contrast, trade
and service companies paid their
chiefs over 100000 year.
Size Factor Uncertain,
Despite all the data it presented,
the fund told the Monopoly Com
mittee it was unable to answer the
question it had been studying for
four years-whether small business
is better or worse than big business
merely because of its size. It recon-
mended
Until we know much more than
we do now about the effects of big
business, penalties - legislative or
otherwise-should not be placed upon
business merely because of its size
unless clearly justified by the evi-