Rise of the Corporate Plutocrats

All of these factors have combined to drive up CEO pay--and pay for lesser executives too. "The CEO's pay package is like a 4,000-horsepower vacuum cleaner," says Crystal. "It sucks into its nozzle any pay package near it. But if you're a regular worker, you're so far away your tie won't even flutter."

economic forces aside, perhaps the most potent force driving up executive pay over the last two decades is something less tangible: a prodigious sense of entitlement.

It's true, as executives often point out, that by and large the companies they run and the global economy in which they operate are both bigger and more complex than they were 20 years ago. Managing a major corporation is an intellectually taxing job. But so is being a surgeon, and they make an average of $73,100 a year. It's stressful, but so is being a cop, and they make less than $40,000. A high corporate post does carry enormous responsibility, but so does being a president of the United States--who is paid $400,000 a year.

The prototype executive of the 1950s and 1960s was the gray-suited Organization Man. But in the early 1980s, with Wall Street on the rise, big-time businessmen began to assume the cachet of movie stars and sports heroes. Suddenly, guys such as Lee Iacocca and Jack Welch were writing bestsellers, grinning from the covers of major magazines and yukking it up with Leno and Letterman.

The boom in business media that accompanied the surging stock market fed, and fed on, this growing cult of the executive. "With an eye to a national audience, the business media focus not on the complexities of organizations or on rapid changes in the business environment, but rather on the actors involved ... making much of winners and losers, of who is up and who is down, of who is a good CEO and who is not," writes Harvard economist Rakesh Khurana in his recent book "Searching for a Corporate Savior." "The press has thereby turned CEOs--once as unknown to the American public as their secretaries, chauffeurs and shoe-shiners--into a new category of American celebrity."

Stephen F. Bollenbach, Hilton Hotels Corp.'s co-chairman and CEO, is an unabashed example of how expansive executives' sense of self has become. To him, the gargantuan sums he and his colleagues take home are right and proper. "By and large, executives earn what they're paid, and the market economy works to make that so," he declares.

Bollenbach, 62, is a beefy, well-groomed man dressed in a crisp white shirt and blue tie when I meet him at Hilton's Beverly Hills headquarters, a jigsaw of rectangular buildings fronted with speckled marble. His large, sunny office has floor-to-ceiling windows that look out on verdant hills to the north, a massive blond wood desk, and a sitting area with a table and green leather chairs.

"I make an awful lot of money," he acknowledges. "For me personally, I'm probably not prepared to work for less."

Bollenbach, chief executive since 1996, pulled in more than $23 million last year, most of it by cashing in stock options. His salary and bonus alone, duly approved by the compensation committee of Crown, Ueberroth et al., came to at least $3 million--more than four times what the man doing his job 20 years ago made, after adjusting for inflation.

One of the most poignant scenes of the months-long grocery strike was surely when a delegation of workers tried to take their case personally to Safeway CEO Steven Burd at his home in an exclusive Bay Area suburb. They were turned back at the entrance to his gated community.