Speaking of crooks, Cotsakos has "money coming out the wazoo!"<NG>
quote.bloomberg.com
04/30 12:45
E*Trade Gives CEO Cotsakos Raise to $77 Million (Update1)
By Stephen Cohen
Menlo Park, California, April 30 (Bloomberg) -- E*Trade Group Inc., the No. 3 Internet brokerage firm by accounts, paid Chief Executive Officer Christos Cotsakos $77 million in 2001, more than quadruple what any Wall Street CEO earned.
Cotsakos' compensation included $29 million in restricted stock, a forgiven $15 million loan, and another $15 million for taxes after the loan was reclassified as compensation, according to a Securities and Exchange Commission filing.
``It falls into the category of `get what you can while you can get it,''' said Bill Coleman, a compensation expert at researcher Salary.com. ``Shareholders should be asking a lot of question about the magnitude of the package and how they could justify it compared to other firms. What's he doing that's so right?''
E*Trade had a $241 million loss in 2001 as online trading by individuals slumped with declining stock markets. Shares of E*Trade climbed 39 percent last year, following a 72 percent drop in 2000.
Merrill Lynch & Co. cut CEO David Komansky's pay in half last year to $16.3 million, while Bear Stearns Cos. CEO James Cayne's compensation dropped 52 percent to $15.7 million. Morgan Stanley Dean Witter & Co. reduced CEO Philip Purcell's compensation 40 percent to $15 million and Lehman Brothers Holdings Inc. CEO Richard Fuld's fell 43 percent to $16 million.
Cotsakos, 53, received $797,880 in salary in 2001 and a cash bonus of $4.1 million, compared with $756,346 in salary and a $1.4 million bonus in 2000. The company paid $2.4 million in taxes on restricted stock that vested during 2001, and $279,678 in taxes on contributions to his retirement plan.
Some of the $29 million in restricted stock will vest quarterly for the next 18 months, and the remainder will vest quarterly for the next five years, the Menlo Park, California- based company said in the proxy filing.
``It's really hard to justify from a company that is not knocking the doors off,'' Coleman said. ``To use $29 million in restricted stock is a big red flag. Shareholders groups are going to be all over them.''
Calls to Cotsakos' office and E*Trade spokeswoman Connie Dotso weren't immediately returned.
Exercising Options
During 2001, Cotsakos made $11 million by exercising options to acquire about 2.6 million shares.
In addition, he received options to buy 1.3 million shares of stock. The company said the options have a potential value of $5.9 million if the stock rises 5 percent a year for the next 10 years or $14.7 million if it gains 10 percent a year for the next 10 years. The new options weren't included in determining the value of Cotsakos' pay package.
Cotsakos' current employment agreement expires next month, and the compensation committee said it gave him extra restricted stock and compensation to retain him.
E*Trade's compensation committee is headed by David Hayden, chairman of Critical Path Inc., a maker of e-mail software in which E*Trade was an early investor and whose board Cotsakos served on. Critical Path said in February that it violated securities laws that require companies to keep accurate records.
Ronald Fischer, vice chairman of Softbank Holdings Inc., E*Trade's third-biggest shareholder and William Ford, a partner at General Atlantic Partners, which was an early backer of E*Trade, also sit on the firm's compensation committee.
Other Executives
Jarrett Lilien, chief brokerage officer and managing director for Europe, Asia Pacific and Latin America, received $2.2 million in salary, bonus and restricted stock. He received options the firm said would be worth $4 million if E*Trade stock gains 5 percent over the next 10 years and $10 million if it gains 10 percent a year.
Jerry Gramaglia, president of the firm until tomorrow, was paid $3.5 million in salary, bonus and restricted stock. The company contributed $584,251 toward his retirement plan and gave him options that could be worth $4 million if the stock gains 5 percent a year or $10 million if it gains 10 percent a year for the next 10 years.
Gramaglia will become ``entrepreneur-in-residence'' at ArrowPath Venture Capital, a venture firm affiliated with E*Trade. Pay for Mitchell Caplan, who will replace Gramaglia as president, wasn't disclosed.
Chief Financial Officer Leonard Purkis received $1.1 million in salary, bonus and restricted stock. The company contributed $210,172 toward his retirement and valued his options at $810,391 if the stock gains 5 percent a year or $2.1 million if it rises 10 percent a year for the next 10 years.
Joshua Levine, E*Trade's chief technology officer, was paid $1.4 million in salary, bonus and restricted stock. He received no options and the company contributed $283,830 to his retirement plan. |
