It's quite extraordinary.
I don't believe this is unreasonable at all. For a corporate officer in a company
doing as well as WIND it is not out of the ordinary.
As Michael Greene pointed out in his comparison of software companies, the real
earnings of Wind River after accounting for stock option grants are reduced more
than any other company in his study.
Who knows why he decided to do this. Have you checked the price of real estate in
the Bay Area lately?
The issue isn't whether or not he needs the money for a house. The Wind River
receptionist also needs money, but that doesn't mean she should be paid millions!
Instead, it's important to consider whether he has earned the money. Dick Kraber has
no experience in the RTOS industry or even any software or technology company. Here's
his biography:
Mr. Kraber joined the Company in August 1995 and currently serves as
Vice President of Finance and Chief Financial Officer. From 1991 to 1995, he
served as Chief Operating Officer and Chief Financial Officer of Peerless
Lighting, an industrial lighting products company. Prior to then, he was
Chief Financial Officer for GardenAmerica and a consultant and engagement
manager for McKinsey & Company. Mr. Kraber has a B.S. in mathematics from
Stanford University and an M.B.A. from Harvard University.
What could a lighting company executive have possibly done in the last 3 years to
deserve millions of dollars of compensation? Here's what his peers are paid at 3
similar size companies cited in Greene's study:
CFO (Company) Salary Bonus Options Ex. Price
Dick Kraber (Wind River) ....... $153,750 $72,992 100,000 38,41
Bill Smith (Integrated Systems) $175,000 $50,000 80,000 10
Robert Riopel (Phoenix)......... $166,700 $68,250 35,000 12
Brian Turner (RadiSys).......... $143,875 $46,920 15,000 38
His salary/bonus is in line with his peers, but his option grants are out of
whack. That's why the SEC now requires SFAS 123 disclosure. |
