Tilting at Ludicrous CEO Pay 2008

I continue to tilt at the robber barron CEO pay packages (2007 post on CEO pay abuses).

2007 pay
Company CEO Pay 5 Year Pay CEO % of 2007 Earnings
1 Apple Steve Jobs $646,600,000 $650,170,000
2 Occidental Petroleum Ray Irani $321,640,000 $509,530,000
3 IAC Barry Diller $295,140,000 $512,270,000
Company Lost Money
4 Fidelity National Financial William Folley $179,560,000 NA
5 Yahoo! Terry Semel $174,200,000 $432,490,000
7 Countrywide Financial Angelo Mozilo $141,980,000 $295,730,000
Company Lost Money
13 XTO Energy Bob Simpson $72,270,000 $215,280,000

Data via: Forbes CEO Compensation (Total compensation for each chief executive includes the following: salary and bonuses; other compensation, such as vested restricted stock grants, LTIP payouts and perks; and stock gains, the value realized by exercising stock options.) and Google Finance (using 2007 earnings – Countrywide from SEC). I realize this chart could be improved by spending more time (the effect of stock options exercised in one year distorts things a bit but the excess are so massively huge that the clarity of the data does not need to be very precise).

Does the percentage tell the whole story? No. For example, Countrywide went out of business. Does anyone believe they made a profit of $2.7 billion as they claimed in 2006 (the accounting gains they claimed in 2006 were not an accurate reflection of the condition of the company)? As I have mentioned I personally see all of Deming’s deadly diseases as still problems today and I would add excessive executive pay to my list of deadly diseases.

Excessive Executive Pay 2005 – “As long as the pay packages were merely large, and didn’t effect the ability of a company to prosper that could continue (slicing up the benefits between the stakeholders is not an exact science). The excesses recently have become so obscene as to become unsustainable. Companies will not be able to compete if they allocate huge portions of the benefits provided by the operations of the company to the few sitting on top of the bureaucracy.”

Drucker on Executive pay: In 1977, his answer was, no. As pay did become excessive, Drucker became a prominent voice against the unjust pay of CEO’s. From the Economist: In the late 1990s he turned into one of America’s leading critics of soaring executive pay, warning that “in the next economic downturn, there will be an outbreak of bitterness and contempt for the super-corporate chieftains who pay themselves millions.”

Related: Obscene CEO Pay (with chart)Unconscionable Executive Pay (at WaMU, not out of business)Warren Buffett on Excessive CEO PayToyota’s CEO pay under $1 millionCEOs Plundering Corporate Coffers

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5 Responses to Tilting at Ludicrous CEO Pay 2008

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  5. Anonymous says:

    Wow I can't believe Steve Jobs makes that much money! I know he made Apple what they are today, but man that's a lot of money. I have long call stock options on Apple and plan on holding them until they expire. Thanks for the blog post this is very good information!

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