This is cool. Beats the 26.5 cent/hr raise I got last year.
CEOs return to days of runaway pay, perks
By ROBERT TRIGAUX, Times Business Columnist
Published April 6, 2005
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Sorry, all you corporate serfs. Step aside, Charles and Camilla. The brief respite from extreme executive compensation is over.
A new era of royal CEO pay is under way.
After several years in which the weak economy and Enron-inspired corruption convinced most CEOs to lie low, top corporate managers once again are commanding jumbo-sized salaries, bonuses and perks on par with the runaway-pay days of the late 1990s.
Evidence of such fattened 2004 compensation is only now trickling out in the proxy statements that publicly traded corporations typically file this time of year with federal regulators. The national pay numbers are BIG, especially when compared to the paltry 2.5-percent annual raises handed the typical worker.
CEOs of large companies enjoyed a startling 25-percent annual boost in compensation last year to about $14-million, according to an early proxy analysis by eComp Data Services. Median CEO salaries rose 5 percent, bonuses ballooned 25 percent and restricted stock awards climbed 33 percent. National newspapers, including USA Today, New York Times, Washington Post and Wall Street Journal, have published stories in recent weeks citing the renewed boom in executive compensation.
I've tried to resist writing about this subject. For a while, it was easy. Corporate times were harder. U.S. companies operated in a post-9/11 period of modesty. A wave of notorious "perp walks" by former champions of industry briefly chilled the greed-is-good mantra. And legal reforms such as Sarbanes-Oxley sent a distinct message to boards of directors that bloating pay increases to CEOs, regardless of performance, were unacceptable.
No more.
One early survey of proxy data shows United Technologies CEO George David enjoyed a pay package of $98-million last year. He was followed by Capital One Financial chief Richard Fairbank, whose compensation topped $85-million in the very same year that Capital One closed its Tampa credit card center and cut more than 1,000 local jobs.
Just to bring these sums a little closer to home, based on a 40-hour work week, David would have earned more than $47,000 an hour, and Fairbank more than $40,000 an hour in 2004.
That's more compensation in one hour than the average Tampa Bay family received in a year's paycheck.
In 2003, the average CEO of a large corporation made 500 times the pay of his or her average worker, up from a mere 140 times in 1991. The 2004 comparison is not yet available but will no doubt topple the 2003 record.
David and Fairbank are this year's poster kids of the greatest excess. But plenty other chief executives are showing up in SEC filings with rich pay packages and some surprising free perks. Among the well compensated CEOs are Merrill Lynch's Stan O'Neal and Allstate's Ed Liddy, who pulled in $32-million and $30.4-million, respectively.
Wachovia chief Ken Thompson enjoyed pay topping $18-million last year, while Verizon's Ivan Seidenberg trailed closely with $15.7-million.
Bank of America's Ken Lewis pulled in more than $20-million, even though the bank paid big penalties for its involvement in Enron, WorldCom and some mutual fund trading irregularities. The bank, No. 1 in the Florida market, also disclosed it spent $35,889 for "monitoring and servicing" home security systems and providing "secured parking" for Lewis in 2004.
Progress Energy, which plans to cut hundreds of jobs to cut costs, recently defended an increase in 2004 bonuses of almost $10-million. Nearly one third of that amount went to top executives.
All these mammoth paychecks have fallen under the spotlight of Harvard Law School professor Lucian A. Bebchuk, author of Pay Without Performance. The new book says CEOs increasingly get pay hikes without regard to corporate success or failure. Bebchuk and co-author Jesse Fried argue the executive compensation process is perverted by directors too cozy with CEOs. The system needs an aggressive overhaul, with directors held more accountable by shareholders, the authors say.
That is an understatement.
Not all CEO paychecks are quite so absurd. At Clearwater's Tech Data Corp., which this week was ranked in the new Fortune 500 as Florida's largest corporation by revenues, CEO Steve Raymund received compensation of $9.4-million, according to eComp Data Services. In Miami, Carnival Cruise Line chief Micky Arison received $8.7-million and, in St. Petersburg, Jabil Circuit CEO Tim Main was paid $5.3-million.
In Jacksonville, former CEO Frank Lazaran received more than $5-million from Winn-Dixie, despite the ailing supermarket company landing in bankruptcy.
Such sums used to sound extravagant. Now they seem almost puny.
There are even a few CEOs left who get a paycheck that by today's surreal standards seems stingy.
Consider Publix Super Markets. The Lakeland grocery store chain is a perennial No. 1 in state market share and (so far) staying ahead of Wal-Mart. Yet Publix CEO Charles Jenkins received 2004 compensation of just $713,931.
At long last, a figure most of us can actually grasp. Enjoy the feeling. It won't last.
Robert Trigaux can be reached at trigaux@sptimes.com or 727 893-8405.
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