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While policymakers in Washington wrangle over how much progress we've made in Iraq, one thing is clear: The war on terror is making some people rich.
President Bush's military buildup has caused defense-contractor revenue to double, triple and even more during the past five years, and their executives have reaped huge bonuses and stock windfalls as the companies' share prices have jumped.
Take a look:
- CEOs at top defense contractors have reaped annual pay gains of 200% to 688% in the years since the Sept. 11, 2001, terror attacks.
- The chief executives at the seven defense contractors whose bosses made the most pocketed nearly a half-billion dollars from 2002 through last year.
- The CEOs made an average of $12.4 million a year, easily more than the average corporate chief. Since the start of the war, CEOs at defense contractors such General Dynamics (GD, news, msgs), Halliburton (HAL, news, msgs) and Oshkosh Truck (OSK, news, msgs) have made, on average, more in four days than what a top general makes in a whole year, or $187,390.
Defense contractor CEOs are enjoying these big rewards partly because much of the war effort is being outsourced by an administration that believes private companies do things better than the public sector, say researchers at the Institute for Policy Studies and United for a Fair Economy.
"In the most privatized war in history, lucrative opportunities abound for chief executives of defense contractors," says Sarah Anderson of the Institute for Policy Studies.
$19.5 million a year
General Dynamics CEO Nicholas Chabraja tops the list of defense-contractor chiefs who have made the most money during the 2002-2006 defense buildup. Between 2002 and 2006, he pocketed $97.9 million, or an average of $19.6 million a year.Sales at General Dynamics increased 76% from 2002 to 2006, with significant help from Department of Defense spending. Overall sales increased to $24.1 billion from $13.6 billion, and at least a third of that increase came from higher Department of Defense spending.
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Those contract awards helped General Dynamics stock more than double to $80 a share from $39 at the start of 2002. In the same time frame, the S&P 500 Index ($INX) has advanced 28%. The big stock advance allowed Chabraja to collect $21.5 million by cashing out stock options last year. General Dynamics, which supplies technology that goes into combat systems used by several branches of the military, was the fourth-largest Defense Department contractor last year.
David Lesar at Halliburton made $79.8 million, or nearly $16 million a year, from 2002-2006. During this time, Defense Department revenue at his company grew from just 4% in 2001 to 40% in 2004. That year, the company got nearly $8 billion in defense contracts out of total revenue of $19.9 billion.
Continued: Who earned the most
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