Call to Waive That Raise

There was no rush of volunteers after Jimmy Carter suggested that high executives waive their pay raises for a year in the crusade against inflation. Corporate chiefs can argue that they too have been squeezed. According to Arthur Young & Co., accountants, salaries of chairmen, presidents and chief financial officers rose an average of 46.9% from 1970 through 1976, a jot higher than the consumer price index climb of 46.6%. In fact, these executives did not keep up with inflation because they were pushed into higher tax brackets, and much of their raises was taxed away. Last year they did somewhat better. A sampling of proxy statements of 50 major companies shows that their top executives' cash compensation--salary plus bonus--rose by almost 11%, v. a 6% jump for inflation.

An exceptional handful did spectacularly well in 1977, even though their raises were not much. The nation's biggest executive earner was Henry Ford II, chairman of Ford Motor Co. Last week the company announced that his salary and bonus edged up 2%, to $992,000. In all, General Motors Chairman Thomas Murphy earned $975,000, an increase of 2.6% over the year before. Mobil Chairman Rawleigh Warner Jr. got $725,000, up 4% from 1976. (For some other high executive moneymakers, see listing.)

Bonuses have become increasingly important as stock options have lost some of their luster and the top tax rate on "earned" income has been reduced from 70% to 50%. Last year IBM Chairman Frank T. Cary received more in bonuses ($337,000) than in salary ($333,000). American Home Products Chairman William F. Laporte's bonus was exactly half his total income of $770,000, while Augustine R. Marusi, chairman of Borden, Inc., earned a bonus of $271,000 to go with his salary of $296,000.

Generally, the income of a top executive rises and falls in line with his company's profits. Examples: Willard F. Rockwell Jr., chairman of Rockwell International Corp., got $636,000 last year, an increase of 27% on a 17% profit gain. Reginald H. Jones, chairman of General Electric Co., received $687,000, a boost of 11%, reflecting a 17% profit rise. Chiefs taking pay cuts included John J. Riccardo, chairman of Chrysler. With company profits down 61%, he received $427,000, a 38% reduction from the year before.

Carter is expected to stress his pay-freeze suggestion when, in a week or so, he begins meeting on a fairly regular basis with business leaders at the White House. One result of any restraints on the top executives' income is that raises for lower-level managers would be pinched to preserve the traditional pay gap between echelons. Further, there is some question about the effectiveness of a freeze. A worker making $10,000 or $15,000 will not be overcome with a need for sacrifice upon hearing that an executive earning $400,000 is forgoing a raise.

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