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Studebaker Wheel
01-11-2012, 12:51 AM
I am sure many of us are taken aback by the outlandish salaries paid to CEO’s of some of America’s largest corporations. This got me to thinking about Studebaker executives and wondering how they were paid during some of the company’s most prosperous years. A brief search through my archives revealed an answer. I found the salaries of Paul G. Hoffman and Harold S. Vance (and some others) for the year 1951. As President and Chairman of the Board respectively they were paid identical salaries. I wonder if you would care to venture a guess as to what those salaries were. To provide some guidance I provide below some figures to help in the process. I will reveal the correct answer at approx midnight on Thursday the 13th. To the winner goes the undying admiration of your many Studebaker friends.

What Things Cost in 1951:
New Car: $1,800 (ave of low cost three)
Gasoline: 27 cents/gal
House: $16,000
Bread: 16 cents/loaf
Milk: 92 cents/gal
Postage Stamp: 3 cents
Stock Market: 269
Average Annual Salary: $4,200
Minimum Wage: 75 cents per hour

jlmccuan
01-11-2012, 12:58 AM
I have to go with $12,500

Studebaker Wheel
01-11-2012, 01:07 AM
http://i230.photobucket.com/albums/ee285/studeq/newsgroup/hoffmanvance1939copy.jpg?t=1326265476

Incidentally the salary of the President of the United States (Harry S Truman) at the time was $100,000.

HAWK64
01-11-2012, 01:25 AM
Those two responsible positions would have commanded $16600 even back then.

BobPalma
01-11-2012, 05:25 AM
Interesting topic, Dick.

I'm glad you're giving us through midnight Thursday, as I'll be seeing my Dad tomorrow (Thursday) and am going to ask him. He'll be 95 years old April 14 and his mind is quite sharp, yet. As you know, he followed the industry carefully immediately after WWII and ultimately opened the Packard dealership with his brother Milton in June, 1953.

We'll see how close he gets to the actual figure.

That said, I would think some research would easily turn up the actual numbers, but I'll not do that and, instead, "go" with Dad's guess and post it here just for grins.

Edit: $99,000. BP

2R5
01-11-2012, 05:35 AM
I'll say $22,500

redbox
01-11-2012, 06:22 AM
I will say $28,500.00.
Joe DeMaggio made $100,000 and Mickey Mantle made $5,000.

At those prices a house was roughly 9 times the cost of a car. That may be a good ratio today

clonelark
01-11-2012, 07:40 AM
$19,444 but after such a great year in 51, 52 may have been higher.

Jeff_H
01-11-2012, 08:27 AM
This heavily footnoted scholarly paper suggests avg CEO pay was about 38x avg worker pay in the early 50s (down from 63x in the 30s).

http://faculty.chicagobooth.edu/workshops/AppliedEcon/archive/pdf/FrydmanSecondPaper.pdf

A graph (on log scale making it hard to interpolate...) elsewhere in that paper shows income about $300k in 2000 dollars for the early 50s. Reverse calculation with a inflation calculator (http://www.usinflationcalculator.com/) would find that $300k in 2000 to be $45k in 1951.

I think it was probably somewhat more than that so I am going to guess $60k.

289stude
01-11-2012, 09:24 AM
Are we talking total cash stock options ect. Or just cash if we're talking total compensation I'm going with $200,000.00 stock options were a big deal tax wise in early 50's and many were over compensated with them.

Michidan
01-11-2012, 10:00 AM
$51,000 for 1951 is my guess.

Studebaker Wheel
01-11-2012, 10:49 AM
Are we talking total cash stock options ect. Or just cash if we're talking total compensation I'm going with $200,000.00 stock options were a big deal tax wise in early 50's and many were over compensated with them.

Good point. This would be cash only.

2moredoors
01-11-2012, 11:29 AM
I just read that a CEO at that time would earn 24 times the average wage which would put Hoffman's/Vance's salary up to around the $96,000.00 mark, however I think that is rather high as they would have other non-tax perks that execs do not receive today. They would have extensive expense and travel accounts, use of company rail cars, company supplied cars for self and family, probably use of company vacation homes/cottages etc. I would still peg their salaries to be around $70 to $75 thousand.

After Hoffman left Studebaker he became head of the Ford Foundation and was not noted for being frugal with himself or its other executives. Henry Ford II reportedly was not pleased with him moving the Ford Foundation HQ to California at great expense.

Scott
01-11-2012, 12:58 PM
Since we're talking about Studebaker and not one of the big 3 I'll say $42,000.

studegary
01-11-2012, 01:22 PM
I will guess $52,000 each.
The posted prices for gasoline and houses seem high to me for 1951.

8E45E
01-11-2012, 01:36 PM
Good point. This would be cash only.

For his 'base' salary, I will probably say $45,000. With the phenomenal success of the 1950 models, he no doubt also received a $35,000 bonus on top of that figure.

Craig

289stude
01-11-2012, 03:34 PM
The average salary for CEO in 1950 for the top 47 co. In the us was 217,000.00 I would assume studebaker made the cut in 1950.

avanti76
01-11-2012, 04:13 PM
$65,000 Base with options.

White Hawk
01-11-2012, 04:29 PM
$14,625.00 annual gross.

Welcome
01-11-2012, 05:31 PM
$45,000.00

JRoberts
01-11-2012, 07:44 PM
The minimum wage has gone from $.75 in 1951 to $7.25. That $.75 in 1951 equates to $6.63 in 2011, so minimum wage is ahead of inflation
The average salary of the CEO's largest corporations has risen from $217,000 [I’m using John’s figures) to $11.5 million in 2011. $217,000 of 1951 equates to $1,888,150.38 in 2011 again meaning that the CEO’s of major companies are beating inflation by quite a bit.
The $100,000 that Harry Truman made in 1951 equates to $870,115.38 meaning that the President’s salary is most ill-affected by inflation.
Looking at all of this may not be logical way to come up with an answer, but it seems to me CEO’s of big companies have always been well paid, usually higher than the President and always quite a bit ahead of inflation.
My guess would be $100.000 for each.

studefan
01-11-2012, 08:40 PM
My calculations are too lengthy to post here so I'll just give the answer - $200,000 and $190,000, respectively.

Lark8girl
01-11-2012, 09:42 PM
A.E. Barit , president of the Hudson Motor Car Co. had a income of $100,000. Studebaker being larger and more prosperous could pay more. My guess $125,000 for Studebaker.

58PackardWagon
01-11-2012, 10:06 PM
$20,500.00

Milaca
01-11-2012, 10:16 PM
My initial thought was $50,000, but after reading some responses it appears too low (but I'll stick with my initial answer anyway).

parts
01-11-2012, 10:19 PM
$122,132.65 plus executive benefits like free Twinkies..

OH NO..Twinkes..no more twinkies..
What has the world come to.
First Studebaker..now Hostess..

Lou Van Anne
01-11-2012, 10:44 PM
More than I made, that's for sure!

dean pearson
01-11-2012, 11:02 PM
68.000 cash + the bennies.
I would think big bucks in the 50's ?

Dean.

dnevin
01-11-2012, 11:16 PM
Their predecessor made $90k in 1948. So I'm going to guess they were hired in at the same rate.

Retired
01-12-2012, 12:15 PM
Remember, when Sherwood E. was hired he was the most paid, Studebaker CEO/President, at $150,000 per year.

plwindish
01-12-2012, 12:23 PM
I'm also guessing $100,000

Roscomacaw
01-12-2012, 02:28 PM
$78,942.43

Welcome
01-12-2012, 03:22 PM
Remember, when Sherwood E. was hired he was the most paid, Studebaker CEO/President, at $150,000 per year.

...and remember in those now famous 1963 minutes of the Studebaker Corporation Board of Directors Meetings, Sherwood E. proposed to the BoD to hire a one Mr. Anthony Granatelli as President of Studebaker’s Chemical Compounds Div. (STP) for only $40,000.;)

Oh well, we'll all have to wait until Thursday, September 13th rolls around to find the answer!:(:rolleyes:

Studebaker Wheel
01-13-2012, 12:47 AM
http://i230.photobucket.com/albums/ee285/studeq/newsgroup/salariesstudeexecs1947.jpg?t=1326436748

Boy is my face red. Preparing to post the image above in answer to the question I find I was four years off! The figures on salaries I have was for 1947 and not 1951! The reason for the error makes sense but is complicated so I will spare you the details. In any event I do not have the correct figures for the year 1951 and cannot declare anyone to be right or wrong! However since the 1947 salaries were at $60,000 we may surmise that the figures four years hence would be somewhat higher and for Mr Vance maybe even $100,000 or more (see explanation below). If your guess was between $60,000 and $100,000 consider yourself a winner! (This doesn't necessarily mean that you are a loser if you had some other numbers!)

As a side note I might add that Paul G. Hoffman left Studebaker in April 1948 upon being appointed by the President Truman to administer the Marshall plan in Europe. After successfully completing that daunting task he resigned from the ECA in Sept 1950 and in January 1951 assumed duties as Director and trustee of the Ford Foundation. He returned to Studebaker in 1953 reassuming his position as Chairman of the Board. Therefore Mr. Hoffman would probably not have been drawing a Studebaker salary in 1951. Harold Vance having assumed the dual positions as President and Board Chairman would likely have seen a substantial increase in his pay check as a result of doing double duty.

Sorry for the error but it was an interesting exercise and I bet you learned something! I know I did! I will leave the interpretation of the figures above to you.