Commentary

The Hot Topic Of CEO Compensation

 

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What's your CEO worth? Some big tech names landed in the Wall Street Journal's ranking of the decade's 25 top-earning CEOs, but the list released Tuesday didn't include Google's Eric Schmidt, Yahoo's Carol Bartz, or Microsoft's Steve Ballmer. Yahoo's Terry Semel, and Apple's Steve Jobs did make the list at No. 8 and No. 4, respectively.

Semel made $490 million heading Yahoo between 2001 and 2007; and beating him out, Apple's Steve Jobs took in about $749 million. But does it matter how much these executives made? Entrepreneurs say management and leadership are important, but prefer not to comment on any connection with financial compensation.

Oracle's Larry Ellison topped the list of the decade's 25 top-earning CEOs, bringing in $1.84 billion in compensation, according to the WSJ analysis. In many cases "pay" includes bonuses, salaries, restricted stock, stock options and other perks.

IAC CEO Barry Diller came in at No. 2 on the WSJ's list, earning $1.14 billion in total compensation, mostly from stock options. Aside from IAC, the WSJ also notes several instances of companies with CEOs on the list -- Countrywide, Capital One and Cendant among them -- where shareholders lost money during the decade.

Wall Street analysts I spoke with say it's not what the CEOs make that's important, but how well each leads their respective company.

Several executives at American-based companies drew a $1 salary to qualify for health and other company benefits. For example, Jobs took a $1 annual salary through the decade, but ranked high on restricted stock gains. So much pay linked to stock compensation gains varied depending on when the execs realized stock options.

Salary and payoffs have been in the news lately. BP CEO Tony Hayward's outgoing corporate payoff of a little more than £1 million, and a pension worth £600,000 annually when he leave in October that he can draw next year when he turns 55, has shocked few, but interested many.

The BBC reports that because Hayward would leave by mutual agreement, the BP board felt it should honor the terms of its contract with him.

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