Top execs in high finance, says the Institute for Policy Studies, have turned hard times — for the American people — into a springboard for still another round of unconscionably huge pay windfalls.

By Sam Pizzigati

Researchers at the Institute for Policy Studies, a progressive think tank in Washington, D.C., have been publishing an annual report on executive pay ever since 1994. The latest edition of this Executive Excess series has just appeared. The report’s verdict? On executive pay, over the last year, nothing has changed — and everything has changed.

The “nothing” surfaces first in Executive Excess 2009. Top U.S. corporate executives, the IPS study documents, are still making hundreds of times more than average U.S. workers, just as they have since the mid 1990s.

To be exact: In 2008, top execs took home 319 times the average U.S. annual worker wage. Three decades ago, before executive pay started skyrocketing, top execs seldom took home more than 30 times average worker pay.

Executive pay, in short, remains painfully excessive. That much hasn’t changed — at all. What has changed? This year, for the first time ever, most Americans now seem to understand the pain that excessive executive pay invariably produces.

Credit that understanding to the global economic meltdown that erupted last September. Super-sized rewards for executives, the new IPS report notes, created the incentives for the executive “recklessness that brought the United States — and the world — to the brink of economic cataclysm.” And most Americans know it, from the President on down.

Unfortunately, the report shows, this new awareness hasn’t translated into any significant action to limit the rewards at America’s economic summit.

“The denizens of our nation’s executive suites,” as the study’s lead author, Sarah Anderson, puts it, “are still going about their business with the same visions of compensation sugarplums that danced in their heads before last September.”

In fact, Anderson goes on to add, America’s financial industry kingpins have essentially turned last year’s high finance meltdown into a springboard to more windfalls.

The IPS report spells out the incredible numbers: The 20 financial industry giants that have received the most bailout dollars from taxpayers have together laid off 160,000 workers since the beginning of last year. In 2008, the top 100 executives at these 20 firms together collected $795.5 million in compensation.

And the gravy train continues. Early in 2009, with financial industry share prices near record lows, Wall Street’s biggest banks began stuffing the pockets of their power suits with millions of stock options. These options give executives the right to buy company shares, a few years down the road, at the early 2009 bargain-basement price.

Financial industry share prices, thanks to the bailout generosity of U.S. taxpayers, have already started rising. These share prices mean that dozens of top financial industry executives have already this year seen their personal portfolios jump by multiple millions — and that’s without counting any salary or bonuses.

This past January, for instance, American Express CEO Ken Chenault pocketed a new option grant that gives him the right to buy nearly 1.2 million shares at just $16.71 per share. American Express shares ended August trading near $34, around half the credit card giant’s highest share price in 2007 before the meltdown began. Chenault stands to make, from his 2009 options alone, over $20 million.

At other firms, a similar story. At JPMorgan Chase, for instance, four top executives have seen their 2009 options jump a combined $21.6 million. At PNC, five executives are looking at $18.5 million in gains on their 2009 options.

In all these companies, meanwhile, ordinary shareholders who hold the same shares they held back in 2007 are still sitting deeply in the red. At PNC, the shares these ordinary shareholders hold are trading 35.7 percent off their 2007 high.

In effect, notes the new IPS report, America’s top banks have invented “a perpetual upward-motion machine for executive compensation.”

If share prices should sink, no problem for executives. Boards of directors simply shell out to them new batches of stock options, all exercisable at the current low share price. And if share prices should sink even lower the next year, explains Executive Excess 2009, boards merely hand out still more option “incentives,” all exercisable at an even lower price.

“Boards,” the IPS study sums up, “will just keep lowering the ‘performance’ bar until they find a height executives can jump over.”

The bottom line in all this?

“America’s executive pay bubble,” says IPS analyst Sarah Anderson, “remains un-popped.”

Congress and the White House could do the popping, note Anderson and her report co-authors, John Cavanagh, Chuck Collins, and this reporter.

But both Congress and the White House have swallowed Wall Street’s “basic operating assumptions” — “that ‘performance’ justifies whatever windfalls may come an executive’s way, that the ‘incentives’ for misbehavior these windfalls create need not be regulated, that executives need never share the rewards that marketplace ‘success’ creates.”

Lawmakers and the Obama administration, having swallowed these assumptions, remain almost single-mindedly fixated on reforms that help shareholders deny windfalls to executives who pocket mammoth rewards while share prices plummet. But the CEO pay problem we face today goes far beyond the windfalls that funnel to poor performers.

“Our problem has become those mammoth rewards, in and of themselves,” notes IPS study co-author Chuck Collins. “Outrageously high rewards give executives an incentive to behave outrageously. They downsize. They outsource. They cook their corporate books. Left to their own devices, they eventually crash the global economy.”

In the process, these executives cost millions of Americans their jobs, their homes, and their retirements.

A few bills now buried in Congress, the IPS Executive Excess 2009 study notes, do offer some tantalizing hints of what real executive pay reform could look like.

One bill, sponsored by Rep. Jan Schakowsky of Illinois, would extend tax breaks and federal contracting preferences to companies that meet benchmarks for good corporate behavior. Among the benchmarks: executive pay that does not exceed worker pay by more than 100 times.

This legislation’s basic message to Corporate America: If you overpay your CEO, you’re not going to get taxpayer dollars.

Nothing that has happened within the U.S. — or global — economy over recent years, the IPS study sums up, justifies the enormous current pay gap between executives and their workers.

“High-ranking executives,” the study observes, “have neither become ‘smarter’ than their workers over the last generation or more ‘productive.’ They have, on the other hand, become more powerful.”

The time has come for lawmakers and the White House to challenge that power.

“Until they do,” the new IPS study concludes, “reckless executive behavior will continue to threaten the economic security — and decency — that Americans hold dear.”

Sam Pizzigati edits Too Much, the online weekly on excess and inequality.