New rules for us corporate pay spawns workarounds
Thanks to the worst recession in decades, the US government has become unusually involved in corporate pay practices.business Updated: Apr 04, 2010 21:15 IST
Thanks to the worst recession in decades, the US government has become unusually involved in corporate pay practices.
Kenneth Feinberg, appointed to scrutinise compensation at corporate behemoths that taxpayers had propped up with bailouts, prescribed that CEOs should pay golf club dues out of their own pocket, and take less pay in cash and more in stock.
But the latter has had unintended side-effects.
The highest-paid banker, J.G. Stumpf of Wells Fargo, vaulted past his better-known peers last year by closely following the Obama administration’s compensation blueprint.
Wells Fargo, which received aid, layered $4.7 million worth of stock on top of its CEO J.G. Stumpf’s $900,000 cash base salary, bringing his total salary up to $5.6 million. Wells awarded Stumpf an additional $13 million in stock, making his total compensation $19 million.
One CEO who is not afraid to flaunt his wealth, Oracle’s Lawrence J. Ellison, was the highest-paid chief executive in a survey by compensation research firm Equilar.
He made $85 million last year — more than the combined pay of the second- and third-ranked CEO’s — Raymond Elliott of Boston Scientific, with $33 million, and Ray R. Irani of Occidental Petroleum ($31 million).
Ellison took all but $6 million of his pay in stock options.