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50 highest-paid CEOs in 2010

Saturday, May 7, 2011 | 6:00 p.m. CDT; updated 11:22 p.m. CDT, Saturday, May 7, 2011
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The typical pay package for a CEO of a company in the Standard & Poor’s 500 was $9 million in 2010, 24 percent higher than a year earlier. The highest-paid CEOs had compensation about three times that or more.

The following are the 50 highest-paid CEOs for 2010 as ranked by an Associated Press analysis for Standard & Poor's 500 companies. The analysis includes companies that had the same CEO for all of 2009 and 2010 and that filed proxy statements with the Securities and Exchange Commission between Jan. 1 and April 30. They are based on the AP's compensation formula, which adds up salary, perks, bonuses, preferential interest rates on pay set aside for later, and company estimates for the value of stock options and stock awards on the day they were granted last year.

  1. Philippe Dauman, Viacom, $84.5 million, up 149 percent.
  2. Ray Irani, Occidental Petroleum, $76.1 million, up 142 percent.
  3. Leslie Moonves, CBS, $56.9 million, up 32 percent.
  4. David Zaslav, Discovery Communications, $42.6 million, up 265 percent.
  5. Richard Adkerson, Freeport McMoran Copper & Gold, $35.3 million, up 76 percent.
  6. John Lundgren, Stanley Black & Decker, $32.6 million, up 253 percent.
  7. Brian Roberts, Comcast, $31 million, up 14 percent.
  8. Robert Iger, Walt Disney, $28 million, up 30 percent.
  9. Alan Mulally, Ford Motor, $26.5 million, up 48 percent.
  10. Jeff Bewkes, Time Warner, $26.1 million, up 35 percent.
  11. Sam Palmisano, IBM, $25.2 million, up 19 percent.
  12. David Simon, Simon Property Group, $24.6 million, up 430 percent.
  13. Gregg Steinhafel, Target, $23.9 million, up 83 percent.
  14. Laurence Fink, Blackrock, $23.8 million, up 50 percent.
  15. William Weldon, Johnson & Johnson, $23.2 million, down 9 percent.
  16. Brian Goldner, Hasbro, $23 million, up 196 percent.
  17. Howard Schultz, Starbucks, $21.7 million, up 45 percent.
  18. Rex Tillerson, Exxon Mobil, $21.5 million, down 1 percent.
  19. Kevin Sharer, Amgen, $21.1 million, up 38 percent.
  20. Aubrey McClendon, Chesapeake Energy, $21 million, up 13 percent.
  21. Gregory Case, Aon, $20.8 million, up 100 percent.
  22. Jamie Dimon, JPMorgan Chase, $20.8 million, up 1,541 percent.
  23. Michael Szymanczyk, Altria, $20.8 million, up 131 percent.
  24. Louis Camilleri, Philip Morris International, $20.6 million, down 16 percent.
  25. Leslie Wexner, Limited Brands, $20.5 million, up 90 percent.
  26. Randall Stephenson, AT&T, $20.2 million, no change.
  27. Miles White, Abbott Laboratories, $20 million, down 9 percent.
  28. Jay Fishman, Traverlers, $19.8 million, down 2 percent.
  29. George Buckley, 3M, $19.7 million, up 41 percent.
  30. Louis Chenevert, United Technologies, $19.5 million, up 9 percent.
  31. Robert Kelly, Bank of New York Mellon, $19.4 million, up 73 percent.
  32. G. Steven Farris, Apache, $19.3 million, up 151 percent.
  33. Carol Meyrowitz, TJX Companies, $19.3 million, up 30 percent.
  34. Ahmet Kent, Coca-Cola, $19.2 million, up 30 percent.
  35. Robert Stevens, Lockheed Martin, $19.1 million, down 7 percent.
  36. John Brock, Coca-Cola Enterprises, $19.1 million, up 34 percent.
  37. James Hackett, Anadarko Petroleum, $18.8 million, down 20 percent.
  38. Michael Duke, Wal-Mart, $18.7 million, down 3 percent.
  39. Ivan Seidenberg, Verizon Communications, $18.1 million, up 4 percent.
  40. James Mulva, ConocoPhillips, $17.9 million, up 25 percent.
  41. Andrew Liveris, Dow Chemical, $17.7 million, up 13 percent.
  42. Paul Jacobs, Qualcomm, $17.6 million, up 1 percent.
  43. John Stumpf, Wells Fargo, $17.6 million, down 6 percent.
  44. Glenn Britt, Time Warner Cable, $17.3 million, up 10 percent.
  45. H. Lawrence Culp, Danahar, $17 million, up 54 percent.
  46. Susan Ivey, Reynolds American, $16.8 million, up 4 percent.
  47. James Cracchiolo, Ameriprise Financial, $16.8 million, down 8 percent.
  48. J. Brett Harvey, Consol Energy, $16.6 million, up 56 percent.
  49. David Snow, Medco Health Solutions, $16.4 million, up 23 percent.
  50. Kenneth Chenault, American Express, $16.3 million, down 3 percent.
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Comments

Gregg Bush May 8, 2011 | 2:22 p.m.

So much for shared sacrifice.
My heartfelt thanks to the editors for including this info.

Is it irony or coincidence that the salary of #11 is just slightly less than the "incentives" from our state?
http://www.bizjournals.com/stlouis/stori...

(Report Comment)
hank ottinger May 8, 2011 | 3:59 p.m.

Obscene.

(Report Comment)
Mark Foecking May 8, 2011 | 4:40 p.m.

If the companies they lead didn't pay them as they do, another company would. You have to remember they are responsible for, in many cases, multi-billion dollar operations. Their salaries are nothing compared to the economic activity they generate.

DK

(Report Comment)
Michael Williams May 8, 2011 | 5:39 p.m.

As soon as y'all start gripin' about the "obscene" salaries of professional sports athletes, Hollywood movie stars, recording stars, and politicians like the Clintons and Kennedys, I'll start whinin' about the "obscene" salaries of corporate types.

Until then, I'm just gonna keep believin' you think liberal "rich" is ok, but conservative "rich" is not ok.

(Report Comment)
Gregg Bush May 8, 2011 | 5:47 p.m.

I humbly submit that "they" don't generate any economic activity.
"They" manage resources. "They" glad hand politicians in exchange for tax favors in exchange for campaign contributions and subsequent political appointments in exchange for public contracts. "They""They" are the parasite class.
"They" cannot hold a candle to a true business leader like Aaron Feuerstein.

(Report Comment)
Gregg Bush May 8, 2011 | 6:17 p.m.

MW - that's a phony talking point. It ain't partisan - it's class. I picked one of them at random, number #8 and went to opensecrets. He gave only to a Democrat last year.

(Report Comment)
Michael Williams May 9, 2011 | 7:42 a.m.

Gregg Bush: You'll have to further explain your "class" comment because, for now, I'm missing your point.

It seems you are saying "professional sports athletes, Hollywood movie stars, recording stars, and politicians like the Clintons and Kennedys" are rather low class....which might just be true in a couple of named cases....but you'll have to explain further for me to understand your point.

(Report Comment)
Mark Foecking May 9, 2011 | 9:01 a.m.

Gregg Bush wrote:

"I humbly submit that "they" don't generate any economic activity."

Um, Exxon-Mobil, Occidental, CBS, Target, etc. generate hundreds of billions of dollars, tens of thousands of jobs, and a goodly bit of tax revenue. Someone making $21 million/year to run a $300 billion corporation like Exxon is nothing compared to the number of jobs and tax revenues they make.

""They" glad hand politicians in exchange for tax favors in exchange for campaign contributions and subsequent political appointments in exchange for public contracts."

That's actually quite a bigoted statement, since we have no specific evidence that any of the mentioned CEO's actually do that. How do you know any one of these CEO's wouldn't help their employees like Feuerstein did? You don't. You don't know what kind of charitable contributions or philanthropic activity any of them do. You seem to be making a judgement that they're rich and successful, therefore they're somehow evil.

Just as I don't look at a person's skin and draw conclusions about them, I don't look at a person's paycheck and draw conclusions.

DK

(Report Comment)
Jack Hamm May 9, 2011 | 9:31 a.m.

These are all publicly traded companies; if their share holders don't have a problem with these salaries why should anyone else?

(Report Comment)
frank christian May 9, 2011 | 10:07 a.m.

Just a note. Exxon earned (according to FOX NEWS) 40B$ last year. Paid 59B$ in taxes to the gov't of the United States of America.

(Report Comment)
Jack Hamm May 9, 2011 | 10:24 a.m.

Frank,

Can you provide a link to that info? Considering that Exxon has not released their 2010 final earnings yet and the fact that Exxon's own estimates put their net earnings at just over $30 billion I'm going to have to say that once again Fox News is full of BS.

"“ExxonMobil continues to deliver strong financial and operating results. The full year
2010 earnings, excluding special items, were $30.5 billion, up 57% from 2009, driven by
higher crude oil and natural gas realizations, stronger refining margins and record
Chemical performance. Fourth quarter earnings were $9.3 billion, an increase of 53%."- Exxon Chairman Rex W. Tillerson

http://www.exxonmobil.com/Corporate/File...

(Report Comment)
Jack Hamm May 9, 2011 | 10:26 a.m.

Frank,

Never mind, I found the article;e that you misread...

http://www.foxnews.com/us/2011/04/28/som...

"Then Cohen took an unusual step and spoke to reporters after Exxon reported the big profits. He said Exxon pays more taxes than any other company in the Standard & Poor's 500 index — $59 billion in the United States over the past five years.

After taxes, the company earned $41 billion from U.S. operations during that period."

You either deliberately left out or misread the part about that is how much they paid in taxes over a FIVE YEAR SPAN, not last year. You should also note that the tax revenue is not federal income tax; Exxon still paid ZERO in federal income tax. The taxes listed are for mostly sales taxes.

(Report Comment)
Gregg Bush May 9, 2011 | 10:29 a.m.

"Um, Exxon-Mobil, Occidental, CBS, Target, etc. generate hundreds of billions of dollars, tens of thousands of jobs, and a goodly bit of tax revenue."
Do not conflate the CEOs with the corporation, nor mistake the purpose of a corporation.

"Someone making $21 million/year to run a $300 billion corporation like Exxon is nothing compared to the number of jobs and tax revenues they make."
Corporations are not in business to make jobs or generate tax revenue. This is from Forbes, April 2010 - "As you work on your taxes this month, here's something to raise your hackles: Some of the world's biggest, most profitable corporations enjoy a far lower tax rate than you do--that is, if they pay taxes at all.
The most egregious example is General Electric ( GE - news - people ). Last year [2009] the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion."

"That's actually quite a bigoted statement..." Nope, it's prejudicial.

"How do you know any one of these CEO's wouldn't help their employees like Feuerstein did?" Feuerstein's greatness, did not come from his "helping" of employees post-fire #2. It derived from his business practices - not extracting all of the wealth from his family's enterprise at the expense of the laborers that actually produce the wealth.

"You don't know what kind of charitable contributions or philanthropic activity any of them do." When they sell most of their homes and give the money away to charity, then they can come sing kum-by-ya with me.
There is no nobility in poverty. However, there is nobility in laboring to produce a good or service and being paid a fair living wage at every step of the process. As long as there are those not making a living wage, the Chief Exploiting Officer deserves derision ----
----which goes into MW's question.
There is no quarrel with athletes or actors or artists (though I have big quarrel with the political class). They actually produce something - home runs, touchdowns, goals, baskets, films, paintings, record albums, novels, plays. They create, and however they are to be monetarily compensated by the marketplace - let them eat cake!
Make no mistake, this is not an anti-wealth or riches. Wealth created in an enterprise should be kept in the hands of the producers of that wealth, not extracted and hoarded by the exploiters in the management class.
That being said, I have worked and work for good managers - people who understand their responsibility to marshal resources for the good of all contributing members in the enterprise from customers to employees.
JH - this is from the Wash. Post ( http://tinyurl.com/3qgjmnd )
The shareholders do have problems with it.
This is from last year. ( http://tinyurl.com/3h8wqlf )

http://www.foxnews.com/us/2011/04/28/som...
It's paragraph 10 & 11. That's a lie by commission.

(Report Comment)
frank christian May 9, 2011 | 10:52 a.m.

Good point Hamm, that Is a problem with TV reporting, you don't get to just re-read it. I missed the 5 year period and you have my humble apologies. I made a "note" concerning the difference between their profit and their taxes. Now I'm wondering why you felt a need to involve income taxes, which are seen nowhere else in this thread.

Will the income taxes paid by the Exxon CEO and employees be ZERO, as well?

(Report Comment)
Jimmy Bearfield May 9, 2011 | 1:06 p.m.

Who pays a corporation's taxes? Its customers and shareholders.

When a corporation's taxes increase, it simply passes that additional cost onto its customers, shareholders or both. Considering that roughly half of all households own stock, those who advocate increasing corporate taxes are begging to pay those taxes in the form of increased prices, lower dividends or both -- even if they don't realize it.

Be careful what you wish for.

(Report Comment)
Mark Foecking May 9, 2011 | 2:03 p.m.

Gregg Bush wrote:

"Corporations are not in business to make jobs or generate tax revenue."

Well, except they do both. The fact that they also generate profits for investors doesn't make them evil.

Businesses don't pay taxes, their customers do. It doesn't bother me that corporations are allowed tax breaks - it makes them more competitive. Corporate America generates a hefty share of our GDP, and making it more difficult for them to stay in business will only decrease tax revenues and increase unemployment.

"not extracting all of the wealth from his family's enterprise at the expense of the laborers that actually produce the wealth."

Were Feuerstein's employees better compensated than comparable employees at other mills? Was Feuerstein not a millionaire? Was his salary large relative to his employees? I'm not sure we have any way of knowing whether his company was in any way less "exploitative" than any other, other than his willingness to keep his employees on salary after the fire.

"As long as there are those not making a living wage, the Chief Exploiting Officer deserves derision ----"

The labor market does a good job at setting people's salaries (when it is allowed to). Upper management has far more responsibility than an average employee, and they also can typically be fired for no reason other than the shareholders don't think they're doing a good enough job. Like I said before, if they weren't being paid well enough to keep them, some other company would.

Nothing forces anyone to take or keep a particular job. Workers accept their pay and benefits willingly, and if that is the case, they're not being exploited. They're simply trading their time and efforts for money and benefits. I don't consider that unfair in the least. Income inequality exists because all jobs are not created equal, and all people are not created equal.

DK

(Report Comment)
Gregg Bush May 9, 2011 | 2:58 p.m.

DK- the discussion is about CEOs not corporations. The notion that somehow anyone is suggesting profits are evil is absurd. Nor am I suggesting that these people are evil, they are probably not sociopaths. They could be but it is not material.
"Like I said before, if they weren't being paid well enough to keep them, some other company would." Yeah. Even maybe they can be fired by the board for running a corporation into the ground and go onto another job like, I dunno, president of a university...after they get a golden parachute, of course. Maybe they'll even get another "bonus".
"Workers accept their pay and benefits willingly, and if that is the case, they're not being exploited." Specious argument that presupposes that both parties are negotiating from parity. If a laborer has access to the identical resources that the executives have (a legion of lawyers and equitable share in the marketplace), then you are correct - the laborer is not being exploited. But if one party in an negotiation has access to superior resources and uses that leverage to extract concessions, that is the definition of exploitation. It works the same in foreign policy - see invasion of Grenada or Panama. Against the protestations of the inhabitants, the 700 pound gorilla moved with great violence.
Regarding Aaron Feuerstein, he recognizes that his wealth came not in spite of the factory workers but because of the factory workers. (My grandfather the entrepreneur and business owner is another who recognized this, may he rest in peace.) Feuerstein could not make all of the Gore-Tex by himself - so he hired people and paid them a living wage, and he took a cut in exchange for doing the really hard work of managing (that is not sarcasm, managing is hard work).
This is not an argument about income equality - jobs are unequal. But to the extent that these folks listed above, specifically #s 22, 28, & 43, took our money and rewarded themselves with such opulence, I am revolted.
This is an interesting bit you wrote: "Well, except they do both [make jobs and generate tax revenue].... Businesses don't pay taxes, their customers do. It doesn't bother me that corporations are allowed tax breaks - it makes them more competitive. Corporate America generates a hefty share of our GDP...." I'm confused. You mean their "customers generate a hefty share of GDP". I think I know what you're trying to say, but it sounds like you're trying to have it both ways - corporations generate GDP, and customers generate GDP. The fact is they both contribute in one way or another. I will recommend authors David Korten and Marjorie Kelly. I've met them both - they're wicked smart.
Finally, just like there is a difference between CEOs and corporations, there is a difference between equality and equity. I advocate for equity in wealth distribution - not equality. The only equality I'm an advocate for is "equality of access to opportunity." That, however, is another matter.

(Report Comment)
hank ottinger May 9, 2011 | 6:39 p.m.

To me, the essence of this issue is one of degree: on average, CEO wages increased 24% last years; workers' wages increased 3%. That's just not right. If it were up to me, I'd like a system in which a CEO could only make, say, ten times the wage of the lowest paid worker--and that includes all the perks, bells and whistles.

(Report Comment)
Jimmy Bearfield May 9, 2011 | 7:15 p.m.

"If it were up to me, I'd like a system in which a CEO could only make, say, ten times the wage of the lowest paid worker--and that includes all the perks, bells and whistles."

If you own stocks, then it IS up to you. If enough shareholders ban together, they can force that kind of change. Of course, the obvious risk is that other shareholders will dump the stock because they believe that the caps will hurt the company's competitive position by making it unable to attract top talent. But if you believe that's a risk worth taking — to the point that you're willing to put your money where your mouth is — then the decision is simple.

(Report Comment)
Paul Allaire May 9, 2011 | 7:27 p.m.

Generally, when making a comment in a long argument it IS a good idea to read the information that others have provided.
( http://tinyurl.com/3qgjmnd )
( http://tinyurl.com/3h8wqlf )
Those links were provided just two posts and a few short hours before your first post today. They refute everything you just said in your last post.

(Report Comment)
Jimmy Bearfield May 9, 2011 | 7:40 p.m.

Paul, the SEC can rule all it wants. That doesn't change the fact that if enough shareholders take a stand, a company's board will listen because money talks. It also doesn't change the fact that Hank and other investors — including you? — have had years to put their money where their mouths are.

Be quiet when grownups are talking. Go post "Send them to Iraq!!!" on the Trib or Paquin Tower Times.

(Report Comment)
frank christian May 9, 2011 | 9:03 p.m.

hank - "If it were up to me, I'd like a system in which a CEO could only make, say, ten times the wage of the lowest paid worker--and that includes all the perks, bells and whistles."

Then, how would this plan make Your life better?

(Report Comment)
Paul Allaire May 9, 2011 | 9:58 p.m.

Frank... I guess only taxes can raise the cost for the corporation and the consumer. Not salaries. Right?

Jim... Have you had any success in implementing change in a corporation. I would really like to hear about it. However I'm not expecting to.

(Report Comment)
Jimmy Bearfield May 10, 2011 | 7:47 a.m.

Paul, when I'm not happy with a company's direction, I conduct shareholder activism by 1) instructing my broker to sell that stock or the mutual fund that holds it or 2) voting against the board members who actions I disagree with.

Other folks -- Hank? You? -- might choose instead to retain your investment and go to a shareholder meeting in hopes of bringing the board around to your way of thinking. The bottom line is that these three options have existed for years and still do.

(Report Comment)
Mark Foecking May 10, 2011 | 8:15 a.m.

Gregg Bush wrote:

"Specious argument that presupposes that both parties are negotiating from parity."

Well, the employee is typically subservient to the employer. A company that can choose from several well-qualified candidates has a lot more bargaining power than any individual candidate. Collective bargaining historically has made up for some of that, but unions have discovered there are limits beyond which their employers become uncompetitive. Union membership has been on the decline since.

:"But if one party in an negotiation has access to superior resources and uses that leverage to extract concessions, that is the definition of exploitation."

See above.

Here's an interesting story from a former grad student that went on to work at a major pharmaceutical firm, whose CEO makes seven figures. She is very happy with her job, compensation and treatment, enjoys all the perks (and they're really considerable - this company realizes the value of their employees), and in fact said she'd do the job for less! It doesn't sound to me like she's being exploited.

"he hired people and paid them a living wage, and he took a cut in exchange for doing the really hard work of managing"

Do you know that? I haven't found anything in my (limited) search that makes me think he paid any better than any competitive industry.

I think most upper managment types realize their wealth depends on their employees. But the also have the responsibility to run the corporation profitably (and this helps the employees through continued employment). If they are paying significantly above market for employees, and not getting increased value for it, they're going to become less competitive than otherwise.

"The fact is they both contribute in one way or another."

Of course. GDP is the sum of all goods and services, all of which generate wages in some form or another. I'm just saying that taxing corporations income merely mekes them have to raise prices in order to remain profitable.

hank ottinger wrote:

"To me, the essence of this issue is one of degree: on average, CEO wages increased 24% last years; workers' wages increased 3%. That's just not right."

Why? Perhaps some of these CEO's are having to take on more responsibility, or it's tougher to recruit them? A corporation that merges with another becomes larger (more to manage), but each worker still has the same responsibilities. I suspect that is more of a market thing than anything immoral.

"If it were up to me, I'd like a system in which a CEO could only make, say, ten times the wage of the lowest paid worker"

A CEO for a company like Exxon ($21 million) has thousands of times the responsibility of a $21,000 janitor or receptionist. Far fewer people are able or willing to be the CEO. Why shouldn't his salary be a thousand times that of the lower paid worker?

DK

(Report Comment)
Michael Williams May 10, 2011 | 8:49 a.m.

From several of the comments, it is apparent to me that many folks have no idea...whatsoever...what it is that a CEO does on a daily/weekly/monthly/annual basis.

Just one big party, I suppose.

(PS: If I invented a widget for which there was significant demand, and I hired a CEO that turned that invention into a billion-dollar-profit business.....that CEO's total compensation package would be in excess of 50 million/year. A price I'd happily pay, btw)

(PSS: Gregg B. says, "Wealth created in an enterprise should be kept in the hands of the producers of that wealth..." I heartily agree. Especially in the hands of the producer that came up with the idea in the first place....and risked EVERYTHING)

(Report Comment)
hank ottinger May 10, 2011 | 9:31 a.m.

Again, I think some of you are missing the point of scale. I don't deny that a competent CEO of a firm should make a handsome salary; rather the whole scheme has gotten whacked out. I don't want to insult the intelligences of those who post here, but I'm sure you're aware of how much a million dollars is. OK, now ramp that up to 20 or 30 million. No one, in my opinion, regardless of what he or she does, is worth that kind of money. Repeat: that kind of money. It's just absurd--or as I put it in a much earlier post--obscene.

(Report Comment)
Gregg Bush May 10, 2011 | 9:40 a.m.

"I think most upper managment types realize their wealth depends on their employees."
And there's the crux of our disagreement. You are mistaken in that thought.
My evidence - Transocean Execs giving themselves "safety bonuses" a year after Deepwater Horizon, Massey Energy still being cited for unsafe working conditions, a major retailer hiring an internal agent to assist employees in filling our welfare paperwork instead of paying their employees a living wage, and finally, in none of the DEF14As, Proxy statements, or 10-Ks from publicly traded corporations do they ever mention their how to pay their employees a living wage. In fact, they only discuss "cutting labor costs" and not the cost of their labor either. Remember, the CEOs get paid from one side of the balance sheet, the employees get paid from the other - that is an inherent antagonism between the two.
So hey, it's been fun.

MW -""Wealth created in an enterprise should be kept in the hands of the producers of that wealth..." I heartily agree. Especially in the hands of the producer that came up with the idea in the first place....and risked EVERYTHING.) This is not a discussion of invention or entrepreneurship. Do not conflate executives, inventors, and entrepreneurs. They perform different functions in an enterprise.

(Report Comment)
Jimmy Bearfield May 10, 2011 | 10:26 a.m.

"I'm sure you're aware of how much a million dollars is. OK, now ramp that up to 20 or 30 million. No one, in my opinion, regardless of what he or she does, is worth that kind of money. Repeat: that kind of money. It's just absurd--or as I put it in a much earlier post--obscene."

A company can make a business case for that kind of pay package if, for example, the board believes that the candidate can almost single-handedly bring in that level of additional revenue. CEOs often are hired partly for their industry relationships, which are one way to open the door to contracts and even mergers that another person couldn't broker. But the board needs to do its duty to shareholders by ensuring that the CEO is earning his or her pay by meeting those expectations.

Keep in mind that for many small companies, the goal is not to become the next Microsoft or Merck. Instead, it's to be acquired by a household name. (They won't admit that publicly, but I hear this strategy all the time when working with small companies.) Paying millions of dollars to hire a CEO who can broker such deals is one way to achieve that goal.

I wonder if sports franchises have the same approach: Signing _____ for $10M annually for will drive an additional $20M annual in ticket sales, TV rights, etc. Speaking of which, do those of you who object to multi-million-dollar CEO salaries also boycott pro sports and publicly complain when former MU student-athletes make several multiples of the median U.S. wage?

(Report Comment)
Michael Williams May 10, 2011 | 10:43 a.m.

Hank:

I reiterate again.....

If I invented a widget for which there was significant demand, and I hired a CEO that turned that invention into a billion-dollar-profit business.....that CEO's total compensation package would be in excess of 50 million/year. A price I'd happily pay, btw.

Those of you who object to this are simply envious...other "logical" arguments be damned. I can think of no other alternative.

PS: I'm pleased, Hank, that you think pay for actors, athletes, singers, the Clintons and the Kennedys make salaries that are "obscene". Now if we could only get you to gripe about THEM, I'd take your gripes more seriously.

Gregg.....do you not understand that executives do much of the driving for invention within their own companies? Do you not understand that decisions about "emphasis" and the subsequent hiring drives much invention?

Gotta go....bbl.

(Report Comment)
Paul Allaire May 10, 2011 | 11:26 a.m.

"Be quiet when grownups are talking."

I don't view you as an adult.
You don't demonstrate that level of maturity when you whine about your taxes and allege that you are going to work less because of them. You apparently believe that without your presence in the job market that the world will somehow not function - that there is nobody who will step in and do whatever it is that you were doing, and I shudder to imagine what. Also, I pointed out that your portion of the burden of federal income tax is less than your portion of the population, the same as the people you complain about. At that point you clammed up, and told me it was none of my business. Childish is the best adjective for that behavior, particularly in light of the fact that you have repeatedly asked other people how much money they were paid over various periods of time. Most of all you certainly don't demonstrate any maturity when you make comments like the one I just quoted.

(Report Comment)
Paul Allaire May 10, 2011 | 11:29 a.m.

Mike, if you invent a "widget" aren't you also going to need to invent some money to pay that salary that is so all important? I've never heard an argument come from air so thin.

(Report Comment)
Paul Allaire May 10, 2011 | 11:30 a.m.

Actually quite inventive. Perhaps you missed your calling. I hear it's not too late...

(Report Comment)
Gregg Bush May 10, 2011 | 11:34 a.m.

"Those of you who object to this are simply envious...other "logical" arguments be damned. I can think of no other alternative."
I would encourage you to use more creativity and think of something more than "envy" as an explanation. Remember, I don't begrudge the wealth of Stephen King (the author) or Damien Hirst (the visual artist) or Bruce Willis (the conservative Republican actor) or Toby Keith (the singer/songwriter) or Carl Edwards (the NASCAR driver). To the extent that the marketplace compensates them for their skill and discipline - let them eat cake! I wish them all the wealth and success in the world.
"do you not understand that executives do much of the driving for invention within their own companies? Do you not understand that decisions about "emphasis" and the subsequent hiring drives much invention?" Don't condescend to me - we were having such a lovely discussion.

(Report Comment)
Jimmy Bearfield May 10, 2011 | 11:50 a.m.

"I don't view you as an adult."

This from someone who constantly posts, "Send them to IRAQ!!!"

"You don't demonstrate that level of maturity when you whine about your taxes and allege that you are going to work less because of them."

Not allege. I am.

"Also, I pointed out that your portion of the burden of federal income tax is less than your portion of the population, the same as the people you complain about. At that point you clammed up, and told me it was none of my business."

Where was that?

(Report Comment)
Mark Foecking May 10, 2011 | 1:00 p.m.

Gregg Bush wrote:

"And there's the crux of our disagreement. You are mistaken in that thought."

No. One can find examples of poor corporate conduct anywhere, but that doesn't mean that most managers don't realize the value of their employees. Corporate misconduct tends to be newsworthy, where companies that do a good job both in the marketplace and by their employees don't get the publicity.

"in none of the DEF14As, Proxy statements, or 10-Ks from publicly traded corporations do they ever mention their how to pay their employees a living wage."

Why are any of those documents a place to discuss how much to pay their employees?

Wal Mart, or Burger King, or McDonalds has no trouble finding employees - if they did, they'd pay more. Their wages are adequate to attract the quality of worker their business is geared to employ. Most of their employees don't want to spend their life behind a register or fry vat, and few do. They're typically something younger people do for extra money, or jobs that welfare to work people do for a while to get experience. Paying a 17 year old student, or a single mother with no experience or diploma, (and perhaps a criminal record) $15/hour will mean these businesses hire a lot fewer of them. Everyone has to start somewhere.

"Remember, the CEOs get paid from one side of the balance sheet, the employees get paid from the other - that is an inherent antagonism between the two."

I'm not sure that's true. In SEC filings, top executive's pay is listed separately from employee wages and benefits, but they are both considered costs on the balance sheet. Usually, total employee wages and benefits are far larger than the total of executive compensation, and executive compensation is a tiny fraction of total revenue.

Whether the CEO makes $500,000 or $50 million makes no difference to a $100 billion corporation. Let the market determine what a reasonable compensation should be.

DK

(Report Comment)
Gregg Bush May 10, 2011 | 2:15 p.m.

"Paying a 17 year old student, or a single mother with no experience or diploma, (and perhaps a criminal record) $15/hour will mean these businesses hire a lot fewer of them." Ouch! What a dig on single mothers.

"In SEC filings, top executive's pay is listed separately from employee wages and benefits, but they are both considered costs on the balance sheet." Please review the "total stock and options awards" from above. Then read about expensing stock options. That is not meant to be glib. Furthermore, dividends, while they are "expenses", come from the profit side of the balance sheet - not from the liabilities side. Employee pay is counted as a liability. That's not to say that profit taking or dividends are immoral, but shareholders don't do or make anything. (Please, don't think anyone needs to school me about IPOs and venture capital. This is not about investment. That is a separate discussion.)

(Report Comment)
Paul Allaire May 10, 2011 | 3:08 p.m.

"Where was that?"

That was the rarest thing you will find, Jim.

You caught me in an error.

The argument was with a "Fred Smith" whose rhetoric sounded exactly the same as yours. In fact, when he typed it out the letters even looked like your typing when I read it on a computer screen. It appears that your "slow year" still had you in a higher tax bracket than the whiner, poor Fred. If your figures are correct you probably actually paid enough taxes to cover your share and maybe even then some, enough to allow you to take pride in your personal agony.

However, I did see at least two instances where you asked me about my earnings and I don't recall bringing anyone's earnings into any discussion. Your behavior is a little rude, boorish, childish, and just plain stupid.

(Report Comment)
Jimmy Bearfield May 10, 2011 | 3:28 p.m.

Paul, your earnings are of interest to us because based on your posts, either you make a lot of money and don't mind giving it away in taxes, or you've never come close to making six figures. Which is it? I doubt that the former chairman and CEO of Xerox is posting on here, although that's not the only reason for my hunch.

(Report Comment)
Mark Foecking May 10, 2011 | 3:34 p.m.

Gregg Bush wrote:

"Ouch! What a dig on single mothers."

No - it's just an observation that some single mothers, often on TANF or other assistance, have no diploma or work experience and therefore aren't worth $15/hour to most employers. They need to start somewhere too.

"Then read about expensing stock options."

Getting stock options as compensation is not counted as a liability, but it isn't taken out of profits either. It just means that person has the option to buy the stock and resell it, or hold it for dividends or appreciation. Dividends are shares of profits, but often aren't a large percentage of the value of the stock itself. The largest value of stock options is generally not the dividends.

I don't understand why executive compensation necessarily works against employee compensation. Employee expenses for most companies are hugely greater than executive compensation. Both are largely set by labor markets. if a company undercompensates its employees, they'll have trouble retaining good ones.

I'm not sure if we're really talking about the original subject anymore, either.

DK

(Report Comment)
Michael Williams May 10, 2011 | 5:27 p.m.

Paul Allaire says, "Mike, if you invent a "widget" aren't you also going to need to invent some money to pay that salary that is so all important? I've never heard an argument come from air so thin."
______________

Say what? I don't need to invent money. I just need to borrow it. Your "thin air" comment is....thin air....and makes no sense whatsoever.
______________________

Gregg Bush says, "Furthermore, dividends, while they are "expenses", come from the profit side of the balance sheet - not from the liabilities side. Employee pay is counted as a liability."
___________________

Wrong, and it shows confusion about balance sheets versus expense reports.

Dividends come from the LIABILITY side of the balance sheet as a part of shareholders' equity (SE). SE goes up when the expense report shows a profit. Employee pay is NOT counted as a liability...there is NO such entry on a balance sheet unless there is a "deferred compensation" entry for key/past executives. It IS an expense on the expense report, which determines profit from which dividends are paid.

You have completely confused balance sheets and expense reports. Let's not even get into cash flow reports.

(PS: I should also point out that C corporation dividends are taxes twice. They are taxed first as corporate profits, then taxed again as personal ordinary income when dividends are distributed. For an S corp, all gains are taxed as personal ordinary income at the personal tax rate.)

(Report Comment)
Gregg Bush May 10, 2011 | 7:31 p.m.

"Dividends come from the LIABILITY side of the balance sheet as a part of shareholders' equity (SE). SE goes up when the expense report shows a profit."
Point of fact, dividends are divisions of profit - not divisions of liability. Here's an elegant way to put it - ( I'm using wikipedia because there no need to reinvent the wheel)
-"Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend."

(Report Comment)
Paul Allaire May 10, 2011 | 8:04 p.m.

Oh Mike, good luck with that.

(Report Comment)
Michael Williams May 10, 2011 | 8:16 p.m.

Gregg: dividends are divisions of profit - not divisions of liability
_________________________

This is just plain incorrect.

In a corporation, profits are a liability owed to shareholders. Any and all profits are the property of the shareholders. They are a debt recorded against the company on behalf of the shareholders. INO, if you own 1 share of a company with 1 million outstanding shares, and that company makes a 1 million dollar profit, the company owes you a debt of 1 dollar. That dollar is a liability recorded by the company.

A balance sheet records assets and liabilities....nothing else. Profits can appear as a current cash asset in the Assets section, but they are counterbalanced in the Liabilities section as a debt owed to shareholders. That debt may either be retained by the company for future growth, distributed to shareholders, or both.

If you don't believe me, look up ANY balance sheet (try Yahoo Finance) and take a look at the Liabilities portion of the balance sheet. You will see something called "Shareholders Equity" or somesuch. THIS is section from whence dividends originate; this category records the entire profit debt owed to shareholders from the corporate beginning to the current date. You will find NO profits or dividends "section" in the Assets portion of the balance sheet because these things are NOT assets.

Again, you are confusing expense reports and balance sheets. Until you get this straight in your mind, you simply will not understand the interrelationships between balance sheets, cash flow, expense reports, current assets, current liabilities, depreciation, and the relative health of a corporation.

(Report Comment)
Michael Williams May 10, 2011 | 8:22 p.m.

Paul says, "Oh Mike, good luck with that."
________________

I assume you are referring to borrowing money.

Been there, done that. Started my own company with 20 grand of my own money and 250K of borrowed money. Paid back the borrowed money in 18 months and, for 12 years, every month was a profitable month except for December and April which were the months I distributed 10% of the corporate after-tax profits to the employees NOT including myself and the vice-president.

So, thank you....I did have good luck. Did well for myself. Learned about balance sheets, expense reports, and cash flow, too. The hard way.

Or, for those of us who do not believe in good luck, I'd say "Good skill."

(Report Comment)
Paul Allaire May 10, 2011 | 9:00 p.m.

And your invention was???????

(Report Comment)
Michael Williams May 10, 2011 | 9:15 p.m.

Paul: Lol. You've been trying to find out which of the many Michael Williams' there are in this county is....me. Hey, if you haven't been paying attention to my posts all this time on the Trib and here, I ain't gonna tell ya what I did.

Anyway, you've missed the point. This isn't about inventions. It's about what a CEO does, or doesn't do, for a company. If I owned a company run by a CEO whom I judged highly responsible for a 1 billion dollar profit, that CEO would be making 50+ million. That's what?......one-twentieth of the profits?

Heck, I'd have no problem with paying 1/6th of my company's after tax profits to an executive that helped make me the remaining 5/6ths.

In fact, that's exactly what I did. My VP made more salary than me.

And my other employees made 20+% more than the comparable job at other companies doing the exact same thing within a 75 mile radius. 12 years.....a turnover of FOUR.

Yep. Four.

(Report Comment)
John Schultz May 10, 2011 | 11:42 p.m.

Michael, allow me to interject for Paul. Did you send those four employees to Iraq? Now we'll see what he can rejoinder with, or I suppose we could ask what his corporate success has been?

(Report Comment)
Michael Williams May 11, 2011 | 7:57 a.m.

JohnS: lol...on where the 4 went.

I'm astonished at the lack of understanding of this thing called a "corporation", who owns profits, what assets and liabilities are, how profits are calculated, etc.

Probably the most accurate statement made in this thread was by Gregg (5/8, 5:47 pm), who said, "[CEOs} manage resources".

Unfortunately, he thought this was a bad thing, and that when you "manage", you really don't produce anything.

I guess "hands-on" is the only pure and productive profession.....

(Report Comment)
Ellis Smith May 11, 2011 | 8:00 a.m.

"So the question is, do corporate executives, provided they stay within the law, have responsibilities to their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no they do not." - Milton Friedman (interview, 1974)

[Why fool around with amateur opinions when you can have a professional opinion for exactly the same price?]

(Report Comment)
Paul Allaire May 11, 2011 | 9:27 a.m.

"Paul, your earnings are of interest to us because based on your posts, either you make a lot of money and don't mind giving it away in taxes, or you've never come close to making six figures. Which is it? I doubt that the former chairman and CEO of Xerox is posting on here, although that's not the only reason for my hunch."

To US????? How many are you speaking for?

Your correct answer is NEITHER.

"I suppose we could ask what his corporate success has been?"

John is warmer than all of you all and he is getting within a few hundred miles of the reason I even chimed in on this thread. I will admit that my first instinct is to hate when I read the amount of compensation some people pull from the shareholders of a company. I also concede that sometimes the salary isn't enough. My main problem is that when a corporation runs for a long enough period of time the management becomes somewhat entrenched and at that point it starts belonging more to the people who were appointed to manage it's operations and the slime balls who wormed their way in rather than the shareholders who actually own it.

My biggest corporate success????

DUMPING my shares of BP about a year before the recent disaster. Initially I had read many opinions and then read some of the company's propaganda. I was excited about their ventures into solar power and I liked the combination of a company that was seemingly committed to solving more energy problems than it created and one that had essentially historically manipulated the governments it worked under in a very right wing manner. It was after I had bought shares that I started looking into previous refinery explosions and safety violations. At some point I determined that the management of the company was entirely different than the image that they paid some advertising firms to project for them. I concluded that it was only a matter of time before another and possibly larger disaster would take place. At that point I evaluated my options as a shareholder and this did not take long. They essentially did not exist. The company technically partially belonged to me on some paper that is being replaced with binary code but not really. It belonged to the cluster of managers who were fortunate enough to be pushed through a business school at an early age and anything that I was allowed to vote on was not of much consequence. I had to wait several months to dump the stock because I didn't want to lose any money. But yes, I was able to see the writing on the wall and I was able to take my money and run.

And I don't really want to discuss whether the management should have had their pay docked more to cover the ninety percent losses that many people experienced in their retirement accounts. You can deal with that. I will say that there are many times when a company makes a lot of money DESPITE the skills of it's management.

(Report Comment)
Paul Allaire May 11, 2011 | 9:32 a.m.

Another thing I should mention is that if the salaries of the management continues to increase at rates similar to what has been the case then at some point they will be the only ones who can afford to buy the shares of their companies. Workers be damned. But hey, everybody wants the world. I just can't understand why the peasants on the sidelines are standing there to cheer them on.

(Report Comment)
Paul Allaire May 11, 2011 | 9:33 a.m.

Oh, and Mike...

I guess this means that you didn't invent anything.

That was my point.

(Report Comment)
Michael Williams May 11, 2011 | 10:05 a.m.

Paul: That may have been YOUR point, but YOUR point was completely irrelevant to the conversation. You went....tangentially....totally off-topic....fell off the curb....layin' in the ditch.

What did I invent? Well, it wasn't a widget. When I worked for another company as a mid-level manager, there were many things I wanted to do that (1) didn't match corporate culture or (2) my boss didn't want me to do.

Once I owned my own company, I was free to try ALL of those ideas. I was free to see if those ideas would give me an edge to compete against my prior company plus others within the US doing the exact same thing.

They worked.

INO, I managed differently. I set the tone. I was the one who hired a VP I had worked with since 1972, a person I knew quite well and who was good at the things I wasn't, but wasn't good at the things I was. We hired great employees at a premium and they were the best employees in the world. My VP and I set the tone for the company, set the expectations, set direction, managed money, managed expenditures, set goals, managed clients, distributed benefits and bonuses, and did all the other stuff managers are expected to do.

I guess you could say I invented a better way of doing what we did......

Which, when it comes to making money, is as good as inventing a widget.

(Report Comment)

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