There's a difference between a CEO that's paid well and one that's raking in loot he clearly doesn't deserve. The former may invoke a bit of ire in this economic climate, but when cooler heads prevail, the cash laid out is usually but a rounding error on the increases in market cap he's driven. An overpaid CEO, on the other hand ... well, it's a bit harder to justify the inflated package.
Kerri Chyka over at CNN Money reports that the Corporate Library sifted through the bloated and legit packages out there to let us know which top dogs are rolling in dough that should probably be left in the company coffers.
1. Michael Jeffries, Abercrombie & Fitch (NYSE: ANF)
Last year, Michael Jeffries made $71.8 million in total, with a base salary of $1.5 million, according to corporate governance research firm, the Corporate Library. It even included a $6 million retention bonus ... because you want to hang on to a guy who the research firm calls one of the five "Highest Paid Worst Performers" of 2008. If that stings, Jeffries can hop on the Abercrombie corporate jet instead of running away. He's paid better than 75% of rival CEOs, while the share price generally underperformed them.
2. James W. Stewart, BJ Services Company (NYSE: BJS)
James Stewart had a good year in 2008, as it outperformed most of its peers, and he nailed a $34.6 million package. In all fairness, $30 million came from the value realized on stock options. The four years that preceded Stewart's strong performance, on the other hand, were lackluster. The future, it seems, is immaterial, as Baker Hughes picked up BJ Services last month, and Stewart will probably be out the door at the end of the year, when the deal closes.
3. Brian Roberts, Comcast (NYSE: CCT)
Like Stewart, Brian Roberts posted solid numbers in 2008 – for himself and Comcast. For his efforts, he picked up a $40.8 million package in the process (base salary of $2.7 million). More than $22 million was related to stock options. He also scored an $881,027 discretionary bonus and another $7.4 million under a non-equity incentive plan. Nice! Also like Stewart, the four years prior to last year were far from spectacular.
4. John Faraci, International Paper (NYSE: IP)
John Faraci's company lost 63% of its value last year – far ahead of the 38% the S&P 500 index fell. This performance was good for a $38.2 million compensation package. Hell, I'd have lost the company 63% for half that comp. Of Faraci's total package, $21 million came in the form of pension payments he received while still employed; International Paper says that the pension payments were included in the Corporate Library's report mistakenly.
5. Eugene Isenberg, Nabors Industries (NYSE: NBR)
Eugene Isenberg was the eight highest paid CEO in the marketplace, according to the Corporate Library, with a total compensation package of $79.3 million. To earn this, he had to shepherd his company to a 51% decline in shareholder value (though it did outperform its competitors over the past 12 months). Most of his income came from a $58.7 million bonus, which is calculated based on company cash flow. But, he just renegotiated his contract, and the bonus formula doesn't give cash flow as much influence.
[Thanks, Kerri]
Hewlett-Packard reports growth in profit and operating margin in Q4
Before the bell: Stocks futures steady ahead of GDP, housing data
Google's plan for netbook PCs moves higher into the clouds
Reader Comments (Page 1 of 1)
9-29-2009 @ 4:49PM
huh? said...
who says they are paid too much? didn't a borad of directors have to approve that? Or is he just sticking his hand in the cookie jar and stealing $$$$... get a clue people....