In an annual report released by the Institute for Policy Studies and United for a Fair Economy that has been receiving major news coverage, the gap between American CEO pay compared to their European counterparts is highlighted as well as the increasing gap between CEO and worker pay.

Here are the key findings of the report, unambiguously titled "Executive Excess 2007":

CEO-WORKER PAY GAP: CEOs of large U.S. companies last year averaged $10.8 million in total compensation, over 364 times the pay of the average U.S. worker, a calculation based on data from an Associated Press survey of 386 Fortune 500 companies.

The top 20 private equity and hedge fund managers, pocketed an average $657.5 million, Forbes magazine estimates. That’s 22,255 times the pay of an average U.S. worker.

Workers on the bottom rung of the economy have just received their first federal minimum wage increase in a decade. But the inflation-adjusted value of the new minimum, despite the hike, stands 7 percent below the minimum wage level a decade ago. CEO pay, in that decade, has increased over inflation by roughly 45 percent.

“The CEO-worker pay gap is finally getting some high-profile attention from Presidential candidates,” says report co-author Sarah Anderson of the Institute for Policy Studies. “But lawmakers still aren’t doing nearly enough to tackle the gap.”

PENSION AND PERK GAPS: CEOs at major U.S. corporations enjoyed, on average, $1.3 million in pension gains last year. By contrast, only 58.5 percent of American households led by a 45-to-54-year-old even had a retirement account in 2004. Between 2001 and 2004, the retirement accounts of these households gained an average of only $3,775 in value per year.

CEOs of S&P 500 companies retire with an average $10.1 million in their special Supplemental Executive Retirement Plans, accounts not open to average workers. By contrast, only 36.3 percent of American households headed by an individual 65 or older held any type of retirement account in 2004. The accounts that did exist averaged only $173,552 per household.

The top 386 CEOs took in perks worth an average of $438,342 in 2006. A minimum wage worker would need to work 36 years to earn as much as CEOs obtained just in perks last year.

THE LEADERSHIP PAY GAP: Compensation for American business leaders now wildly dwarfs the pay that goes to leaders in other sectors of American society. The 20 highest-paid individuals at publicly traded corporations last year took home, on average, $36.4 million. That’s 38 times more than the 20 highest-paid leaders in the nonprofit sector and 204 times more than the 20 highest-paid generals in the U.S. military.

The 20 highest-paid figures in the private equity and hedge fund industry collected 3,315 times more in average annual compensation in 2006 than the top 20 officials of the federal government’s executive branch, a group that includes the President of the United States.

“Today’s soaring pay gap between business executives and elected leaders in government essentially makes corruption inevitable,” notes Sam Pizzigati, an Institute for Policy Studies associate fellow. “With such huge windfalls at stake, business leaders have a powerful incentive to manipulate the political decisions that affect corporate earnings.”

THE US-EUROPEAN EXECUTIVE PAY GAP: In 2006, the 20 highest-paid European corporate managers made an average of $12.5 million, only one third as much as the 20 highest-earning U.S. executives took home last year. These 20 top European execs led companies that generated $19 billion more in sales revenue than the corporations led by their higher-paid American counterparts.

The United States isn't the only country experiencing major problems with executive compensation. Earlier this week, Germany's largest investors' organization submitted a lengthy complaint on executive compensation practices. Notably, many German companies failed to report executive compensation figures in many of the annual reports made by public companies. This comes just months after new legislation passed requiring companies to disclose such information as growing public unrest surfaced. Whether or not these increased reporting standards will change anything remains to be seen; however, it is definitely a step in the right direction.

Australia is a location of growing concern over excessive executive compensation amounts that some officials say are causing many people to question the capitalist system. This has led the government to ramp up pressure to reduce the excessive amounts of executive compensation and reassure the public that pay equality is possible. The move comes after a public outcry over an $11.8-million Australian ($10-million U.S.) salary package for Sol Trujillo, the American CEO of Australia's largest phone company Telstra. Many normal citizens believe this pay package is highly unreasonable.

Mr. Trujillo's pay also reopened a conflict between Mr. Howard and corporate Australia that started in May when the Prime Minister launched a campaign against a $33-million pay packet for Australia's top-earning CEO, Macquarie Bank Ltd. chief executive Allan Moss. In the end, this dispute is likely to continue as long as CEO compensation continues to outpace that of the average worker.

A new study in executive compensation confirmed the logical thought that "outsider" CEOS receive far greater compensation than "insider" CEOs. The study, conducted by Kevin Murphy of the University of Southern California and Ján Zábojnik of Canada’s Queen’s University suggested that companies not only prefer "general managerial abilities" by outsiders more than "firm specific abilities" offered by company insiders but outsiders are often paid significantly more.

"Bottom line is that you don’t have to pay very much to promote someone internally to the CEO chair," said Mr. Murphy, in an interview. "You could probably ask that executive to take a cut and they’d agree to it just to get the general managerial experience. But you have to pay a lot to compete with other firms for the top managers, and that pay will depend on how much of a CEO’s skills are transferable across firms and industries."

Need examples? Just look at Ford's recent appointment of Boeing executive Alan Mulally or Chrysler's new CEO Bob Nardelli from Home Depot. In both of these cases, the acquiring companies are paying a hefty premium to bring them as an outsider into their business. Businesses claim it works, while others suggest that it comes as the result of a scramble following a failed attempt to succession planning. Regardless, it is definitely an interesting trent to watch that is picking up significantly as of late.

Activist investor Robert Chapman sent a harsh letter criticising the executive compensation at Glenayre today:

As many are aware from our widely-read Schedule 13D amendment filed with the SEC on December 14, 2006 (http://www.sec.gov/Archives/edgar/data/808918/000136541706000035/formsc13d.htm), Glenayre Technologies, Inc. (“Glenayre” or the “Company”) 9.9% owner-advisor Chapman Capital views you as nothing more than a “washed-up entertainment industry executive” who was hoisted (by fellow Glenayre “siphoner” and Chairman, Mr. Clarke Bailey) from recent un/self-employment into a public-company position that paid you nearly $2 million annual compensation, plus “EDC profit interests,” in exchange for your supervisory oversight (i.e., not operational management, left to Mr. Thomas Costabile) of a $150 million micro-market capitalization, loss-producer (Source:  2006 Form 10-K: http://www.sec.gov/Archives/edgar/data/808918/000095014407002895/g06102e10vk.htm).
 
The fact that Glenayre’s Board of Directors (the “Board”) gifted you (i.e., for free) the initial $215,000 that you used to obtain, for free, your initial investment in the Class B units of Glenayre subsidiary EDC has not escaped Glenayre’s lividly indignant owners.  Taking into account that $215,000 “signing bonus,” on top of your base salary during partial-2005 EDC employment, “your” entire 2005 investment in Glenayre’s EDC subsidiary required essentially not a single penny from your own, pre-Glenayre bank account.  Viewed in that light, I must opine that you have Guinness Book of World Records-qualified genitalia of steel to attempt, after watching Glenayre’s stock tumble from nearly $6/share to under $2/share during your CEO tenure, to exchange these “free” and potentially worthless EDC equity options (“profits interests”) for actual common shares in Glenayre - the same shares that Chapman Capital and other owners have purchased with their investors’ own, hard earned money.

James Caparro Two-Year Refusal to Buy Glenayre Stock: Literally for years, Glenayre’s owners have beseeched you to use your own personal retained earnings (from decades of “success” in the entertainment industry) to purchase, on the open market, the same Glenayre’ common shares that have been purchased by your nearly $2 million/year compensating benefactors, Glenayre’s true owners.  Despite a wide variety of periods during which you had the legal right (and arguably ethical devoir) to purchase Glenayre stock, you have refused to purchase even one single share, using defenseless excuses and pretexts that would be accepted as reasonable only by a simian imbecile (this is not to be taken as a direct reference to Mr. Matthew Behrent, Glenayre SVP & Chief Acquisitions Officer, who was rewarded indirectly out of Glenayre’s owners’ pockets for the brilliance of liquidating Glenayre Messaging immediately following its loss of Sprint-Nextel as its primary customer).  However, after reading the Glenayre 2007 Proxy Statement on Schedule DEF14A (the “2007 Proxy Statement”) recently filed with the SEC on April 26, 2007 (http://www.sec.gov/Archives/edgar/data/808918/000095014407003810/g06789def14a.htm), Glenayre’s owners finally have gained a sense for what may be Jim Caparro’s true master plan.
 
Illegal Exchange of EDC Equity Options for Glenayre Common Stock:  It is with the utmost seriousness that I caution you and “your” Board against further “evaluating whether to exchange the EDC profits interests for equity of the Company” … “in order to align the equity compensation received by all executive officers." (Source: 2007 Proxy Statement, Page14).  By the Board’s own admission per the 2007 Proxy Statement, “the [EDC] profits interests are designed to work like options, and they vest over a two-year period or upon a change of control of EDC.  The profits interest structure was used instead of stock options because at the time of the acquisition, a limited liability company could not grant options without tax risks. As such the profits interest structure was created to incentivise [sic] management in lieu of stock options.  As a result, the Tier 1 Profits Interests function similar to options with an exercise price equal to the original per share equity investment, and the Tier 2 and Tier 3 profits interests have exercise prices at 50% and 100% premiums, respectively, to that value.”  If these “EDC Equity Options” (the proper moniker for them, instead of “profits interests,” based on the Board’s own description of their intended design and function) are to be exchanged for anything, it must not be for “equity of the Company”) but instead for Glenayre Equity Options (i.e., options to buy Glenayre common shares) with identical exercise prices a) equal to the original, b) 50% higher and c)  100% higher than" the price at which Glenayre traded upon the announcement that Glenayre’s only business would be EDC. It has been noted by Chapman Capital (and other significant Glenayre owners) that Glenayre cannot claim to have completed any EDC Equity Option-for-Common Stock exchange given that a) no Form 8-K or related press release has been issued by Glenayre making public what would be, without question, the material event of Glenayre’s owners being massively diluted via an (illegal) exchange of “profits interests for equity of the Company”, and b) the two-year tax period following the date of the EDC acquisition’s completion /closing on May 31, 2005 has not elapsed (Source: http://www.sec.gov/Archives/edgar/data/808918/000095014405006192/g95544e8vk.htm).
 
Litigation by Chapman Capital et. al. a 100% Certainty:  Under no circumstances should you expect to avoid litigation by Glenayre’s owners should you exchange your EDC Equity Options for actual Glenayre common stock.  Given the state of the physical audio (compact disk) industry, exacerbated by your oversight of the EDC business, it may be argued that the value of EDC has fallen significantly since its May 31, 2005 purchase by Glenayre. As a result, Glenayre’s owners are not so ignorant to be unaware of the fact that those EDC Equity Options (“profit interests”) never may become “in the money,” and thus may prove to be absolutely worthless, as a direct result of a) the decision of the Board, you, Mr. Bailey, and strategic advisor/profit-interest recipient Morgan Joseph & Co. Inc. (http://www.morganjoseph.com) to buy EDC from Universal Music Group in the first place and b) your own (mis)management of EDC/Glenayre into its current and prospective state of cash flow generation and value.  I cannot exaggerate the following point:  DO NOT force Glenayre’s owners to squander their own and Glenayre's cash resources on prosecuting and defending respective lawyers to rake you over smoldering, white-hot legal coals (figuratively) in response to any further attempt by owners of EDC Equity Options to misappropriate the equity, cash and other assets of the company owned by holders of Glenayre common shares (that excludes you, of course).  Your greed has tested our collective patience too long, and too far; moreover, it shall not be difficult to prove in a court of law the outright breach of fiduciary duty by this agedly conflicted Board of Directors.

Fair Exercise Price for Glenayre Equity Options: Based on the market’s own valuation of Glenayre and EDC as one and the same following the sale of Glenayre Messaging, the exercise price on any Glenayre Equity Options received by you and others (in exchange for EDC Equity Options, a.k.a. EDC “profit interests”) must be set at no less than a price between $2.37 and $2.70 per share.  On December 14, 2006, in immediate response to the Company’s announcement that it had agreed to sell Glenayre Messaging to IP Unity for $25 million (Form 8-K; http://www.sec.gov/Archives/edgar/data/808918/000111667906002755/glen8k-121506.htm), Glenayre’s common stock closed at $2.61/share; moreover, for the balance of 2006, Glenayre stock traded between $2.40 and $2.60 per share, averaging $2.53/share during those final two weeks of 2006.  On January 3, 2007, when the Company’s stock traded and closed at approximately $2.50/share, Glenayre announced “that on December 31, 2006 the Company completed the previously announced sale of its Messaging business to IP Unity for $25 million in cash” (Form 8-K; http://www.sec.gov/Archives/edgar/data/808918/000111667907000117/glen8k.htm ).  In the following two months, the market valued Glenayre, once again essentially as the EDC division itself, between $2.37 and $2.70 per share.  I repeat, between the date Glenayre Technologies became EDC for all intents and purposes, and March 6, 2007, Glenayre was valued by the market at an average closing price of $2.57/share.  Only after the March 6, 2007 conference call in which you introduced disappointing guidance for EDC (and not Glenayre Messaging, which had been sold the prior year), which formed the rationale for the nearly 40% downward revision (from $5.00 to $3.10) in Glenayre’s share target price by its only Wall Street sellside research analyst, did Glenayre’s stock begin its descent to Caparro-induced depths under $2.00 per share.  As a result, there is absolutely no justification for setting below $2.37 - $2.70/share the exercise price of any Glenayre common stock options you and others may receive in exchange for potentially worthless EDC Equity Options (“profit interests”).

Excessive Board Compensation: With net losses in two of the last four quarters (or three if you do not count extraordinary items), it seems inconceivable that the Board can justify compensation of roughly three quarters of a million dollars (Source: 2007 Proxy Statement, Page14). Included in this amount are stock awards worth $21,499 per director and option awards reaching as high as $84,066. Chapman Capital finds the awards of any such “rewards” insulting to Glenayre’s owners who endured a 21% loss in share value during calendar 2006. The Compensation Committee claims to believe that compensation should reward performance. Chapman Capital believes that as well.

Misaligned Compensation Structure: Members of Glenayre’s management have economic incentives that are directly opposed to shareholder interests. Despite the fact that EDC was structured as a limited liability company to maximize the utilization of Glenayre’s tax loss carryforwards, Messrs. Bailey and Behrent are contractually entitled to awards of stock options upon completion of certain acquisition or divestiture events, irrespective of their success or failure as measured by an assessment of the return or loss to Glenayre’s owners. It is no wonder then that “Mr. Bailey remains focused on acquisition opportunities for the Company” as he stands to gain from any increase in M&A activity. For his “outstanding performance” in divesting the messaging business (at near liquidation value), Mr. Behrent was awarded a discretionary bonus of 250,000 options (Source: 2007 Proxy Statement, Page 12).
                                                                                                                             
Third Point Activist 13D Filing:  Last week’s Schedule 13D filing by Third Point LLC (http://www.sec.gov/Archives/edgar/data/808918/000089914007000879/g3727409b.txt; May 3, 2007) was your first official warning that your continued siphoning off of value from Glenayre had forced yet another large owner to defend its investment via activist, corporate warfare.  In such filing’s Item 4, Mr. Loeb also made specific reference to the issue of an improper exchange of EDC Equity Options for Glenayre Common Stock, stating, “the Reporting Persons are concerned that Mr. Caparro will unduly benefit from an exchange of these "options" into Company "equity" [emphasis added] while the Common Stock valuation is temporarily depressed.” The fact that your latest brush with a Glenayre owner seeking to protect his clients’ investment came so soon after your meeting with its representative, Mr. Jeffrey R. Perry, is further testament to the failure of your tyro-level of chicanery and financial slight-of-hand.  It should be noted that Chapman Capital shares the four stated concerns listed in such Item 4, having concluded that what is “clearly best for shareholders” is to “put the Company up for sale.” If by now you have not realized that the days of your being paid an annual compensation exceeding $1.8 million (based on the Board’s awarding you a 100% bonus for 2006 performance) for the service of driving Glenayre’s owners’ collective investment into the ground, it’s high time for a reality check.

You might not expect to see a detailed article on executive compensation in a fashion industry tracker, but Women's Wear Daily, "Your Daily Dose of Fashion Industry News," features exactly that today. In "Executive Pay, LBO Shift," WWD details the bigger pay for retail executives compared to their vendor counterparts. Top among vendors is Ralph Lauren, Chairman and CEO of the comapny that bears his name, with $25.9 million in pay last year. Though certainly a good compensation package, it is significantly smaller than the top retailer pay belonging to Target CEO Robert Ulrich who took home $36.4 million. In fact second and third place among retailers, belonging to Wal-Mart President and CEO Lauren Lee Scott Jr. and Abercrombie & Fitch Co. Chairman and CEO Michael Jeffries, both earned more than top paid Ralph Lauren.

The trend of fashion retailers earning more than vendors is reflected in a comparison of the total pay of the top 10 executives from both categories, with the top retail executives earning nearly $200 million while vendor executives were paid about $89 million cumulatively.

The former chief executive of Brocade was convicted of securities fraud in the first ever case of criminal options backdating. Gregory Reyes was convicted on ten counts, including fraud, falsified accounting, conspiracy, and falsifying financial statements. He faces up to 20 years in prison for defrauding shareholders between 2000 and 2004 by conspiring to alter the dates on stock options granted to employees and falsifying documents to cover the scheme.

Mr. Reyes's lawyer, Richard Marmaro, issued a statement saying his client was innocent. "We are confident he will ultimately be exonerated. At all times, he acted in the best interests of the employees and shareholders of Brocade," Mr. Marmaro said.

Chrysler's new chief executive may seem a little familiar to critics of executive pay - Robert Nardelli is set to take his seat at the head of the company after being forced to resign from Home Depot over executive compensation issues. His new employer - private equity firm Cerberus Capital - agreed to hire him but failed to disclose any details about his compensation other than the fact that it would be tied to the automaker's progress throughout its turnaround.

Nardelli himself indicated that he thinks the new compensation is fair and hopes it will not become an issue with Chrysler's ongoing contract talks with the UAW union. "The last thing I would want to be as part of the new Chrysler is a distraction," Nardelli told reporters in a news conference at Chrysler's headquarters. "It certainly is my hope that it doesn't become an issue."