War means a windfall for CEOs
Money Central
By Michael Brush
September 19, 2007

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.

Original Text