CEO Pay

Recently, in a report on current CEO pay, CEO compensation seems to have become a major issue. In recent years, boards have shifted the mix of executive pay away from cash and toward stock options. Stock options now represent 53% of CEO compensation packages compared to 40% a decade ago. Options averaged $5 million in 1999, up 17% from 1998. Among major firms, 1998 CEO compensation averaged $30.5 million, up 36% from $22.4 million in 1997. That includes salary, bonuses, value of restricted stock and assorted perks, gains from exercising stock options and the 12-month rise in value of unexercised options.

According to a 1999 article by Ron Yezzi of Minnesota State University, corporate CEO’s in the United States, on average, earn 32 times as much as comparable CEO’s in Great Britain, six times as much as those in Japan, and four times as those in Germany. While it may seem initially outrageous for a CEO to make 100 times the salary of a typical worker at the company, some perspective is necessary. Unlike the CEO of a large corporation, the typical worker does not have to make decisions that affect thousands, or even tens of thousands of employees, answer to the stockholders who

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Woolard was quoted saying “Jobs saved this company” and if that is the case then any compensation he receives from Apple is justified. “No one should expect to make a fortune for failing at their job,” argued Charles M. Jerrold Perenchio, has big numbers to brag about, but it’s not his paycheck. There are, in fact, cases of CEO’s getting paid in what many would say is more than reasonable. Millard Dexler, CEO of apparel chain powerhouse, Gap, is another example of the relationship between compensation and performance. For that, he is walking away with stock options and other goodies worth at least $120 million. Since Drexler became CEO in 1995, Gap shares have rocketed 730%, including a 1998 gain of 138% versus a 28. Corporate profits and stock values are proof that Disney is currently in better shape financially than before Eisner’s leadership. Wetherell gets the blue ribbon for shareholders’ returns. 5% but CEO Charles Wang and other executives split a $1. Dunlap for poor performance, Sunbeam Corp.

PAY-FOR-PERFORMANCE AND JUSTIFICATION FOR CEO PAY

CEO’s in the United States get paid far more than CEO’s in other countries.

Part of the reason CEO compensation is extremely high contributes to the fact that they are expected to perform well in times of company crisis.

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