El,
Income Statements -- Perks, privileges and other tidbits
Jun. 04, 1999 (Computer Reseller News - CMP via COMTEX) -- A NICE OPTION TO HAVE
Despite large cash payments, most executives make their real money in stock options. Below is the
potential value of options granted last year, according to each company's proxy.
Michael Dell
Chairman, CEO
Dell
$105,372,000
John Chambers
President, CEO
Cisco
$63,256,698
Timothy Koogle
President, CEO
Yahoo
$60,511,295
Stephen Case
Chairman, CEO
America Online
$42,037,771
Jeffrey Mallett
COO
Yahoo
$40,149,161
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DIRECTOR COMPENSATION
Directors continue to get more money for their efforts. And in keeping with the trend for executive pay, directors also are seeing a
greater percentage of their pay come in the form of stock awards. In fact, 35 percent of director pay came from stock awards and
options last year, according to a study by compensation firm Pearl Meyer & Partners Inc.
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NOT-SO-SEVERE SEVERANCE
When Compaq Computer Corp. unceremoniously removed chief executive Eckhard Pfeiffer recently, it put one of the industry's
highest-paid executives among the ranks of the unemployed. But do not feel too bad for Pfeiffer. According to the terms of his
employment agreement, Pfeiffer is to receive a severance payment equal to four times his base salary upon termination of
employment without cause, or his resignation. Pfeiffer also stands to vest in all his outstanding stock options. With a 1998 base salary
of nearly $1.5 million, Compaq owes Pfeiffer nearly $6 million for firing him. And the 875,000 options Pfeiffer was granted in 1998
alone vest immediately, as opposed to the 60-month original timetable. The only real catch: Pfeiffer may not compete with Compaq
or solicit its employees for 24 months.
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THANK YOU VERY MUCH!
Lucent Technologies Inc. is apparently very happy with its chairman and chief executive, Richard McGinn. Here is a partial
explanation of Lucent's thinking regarding the more than $11 million in cash bonus McGinn was paid last year, according to the
proxy:
"For fiscal 1998, the Committee considered, in assessing Mr. McGinn's performance and determining his short-term incentive award,
the following accomplishments under Mr. McGinn's leadership:
The Company's revenues from continuing operations for the fiscal year grew by 20.3%. Net income, excluding one-time events,
increased 51.8%. Earnings per share increased 47%, also excluding one-time events. The Company's revenues from international
operations increased by 22%. The market price for the Company's Shares (split-adjusted) increased over 70% versus the price on
September 30, 1997. The Company's progress in implementing its strategy to grow the business at rates greater than the market
opportunity. The acquisitions the Company has made to address opportunities in the data networking product area, build distribution
channels and expand globally. The Company's progress against measures to assess customer satisfaction.
In addition, Mr. McGinn has personally led the Company's efforts to create a high-performance operating environment and an open,
supportive and diverse workplace. The Committee further noted Mr.
McGinn's
consistent high level of performance since the Company's formation and his integral
involvement in the Company's success, including total return to Shareowners, since the Company's initial public offering in April
1996. Based on this analysis, the Committee awarded Mr. McGinn an annual bonus of $4,417,652, which was substantially above the
target level and a special, one-time bonus of $7,444,000."
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PROXY POINTS . . .
- After receiving a $10 million bonus in 1997, which made him the highest-paid executive in the industry, Data General President
and Chief Executive Ronald Skates received no bonus in 1998. In fact, no Data General executive received a bonus last year.
- Michael Dell is not only among the richest stockholders and highest- paid executives in the industry, but he received options last
year that could be worth more than $100 million, the highest value of any options granted among the industry's executives.
- All Microsoft executives saw their bonuses decline in 1998 vs. 1997.
- Steve Jobs must really be enjoying working at Apple because he is certainly not doing it for the money. Jobs only gets paid $1 a
year for his work, was granted no options last year, and does not appear among the top stockholders in the industry.
- Dendy Young took over the reins at GTSI for a $1 annual salary, but after two years on the job, he got a bit of a raise. Last year,
Young received $310,374 in base pay and a bonus of $64,405 from GTSI.
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