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Who's The Most Overpaid S&P 500 CEO? Underpaid?
Mary Thompson | 09 Oct 2008 | 03:51 PM ET
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As government officials weigh how to limit executive pay at financial firms looking for a handout from the bailout, proxy advisor Glass Lewis & Co. has released its report on executive pay in 2007.



Mary Thompson
CNBC Reporter

Using its own pay-for-performance formula, Glass Lewis, reveals the 25 S&P 500 CEOs it considers to be the most overpaid, and the 25 it sees as the most underpaid. (The report also takes a look at Russell 3000 CEOs as well.)

The formula takes annual compensation into account. It also includes the company's performance, using metrics that include the firm's 2007 net income, its share price performance and its return on equity. What the formula excludes is a CEO's deferred compensation,  which is included in a CEO's total compensation as disclosed in SEC filings.

What companies overpaid their CEOs? According to the report, SprintNextel [S  Loading...      ()   ], homebuilders KB Homes [KBH  Loading...      ()   ] and Pulte Homes [  Loading...      ()   ], CBS [CBS  Loading...      ()   ], General Motors [GM  Loading...      ()   ] and Ford [F  Loading...      ()   ]. It is interesting to note, the CEOs of the failed brokerages Bear Stearns and Lehman Brothers weren't included on the list.  But remember, their troubles, while apparent last year, accelerated in 2008.

As far as the best values, Apple [AAPL  Loading...      ()   ], Amazon [AMZN  Loading...      ()   ] and the oil services firm Schlumberger [SLB  Loading...      ()   ] were among those companies underpaying their executives, executives who delivered superior performance last year.

  Top 25 Underpaid CEOs - S&P 500
RankCompany Name
1Apple Inc.
2MEMC Electronic Materials Inc.
3Leucadia National Corp.
4Titanium Metals Corp.
5Amazon.com Inc.
6Stryker Corp.
7Allegheny Energy Inc.
8Schlumberger Ltd.
9Waters Corp.
10Microsoft Corp.
11Questar Corp.
12Host Hotels & Resorts Inc.
13Windstream Corp.
14C.H. Robinson Worldwide Inc.
15NYSE EURONEXT
16Thermo Fisher Scientific Inc.
17CME Group Inc.
18Cognizant Technology Solutions Corp.
19National Oilwell Varco Inc.
20Apache Corp.
21Google Inc.
22TECO Energy Inc.
23Sigma-Aldrich Corp.
24AutoZone Inc.
25PPL Corp.
Source: Glass Lewis & Co.

  Top 25 Overpaid CEOs - S&P500
RankCompany Name
1Sprint Nextel Corp.
2KB Home
3Jones Apparel Group Inc.
4E*TRADE Financial Corp.
5Merrill Lynch & Co. Inc.
6Masco Corp.
7Liz Claiborne Inc.
8Pulte Homes Inc.
9CBS Corp
10McKesson Corp.
11Electronic Arts Inc.
12General Motors Corp.
13Dynegy Inc.
14Computer Sciences Corp.
15Advanced Micro Devices Inc.
16Regions Financial Corp.
17Nabors Industries Ltd.
18Ashland Inc.
19Office Depot Inc.
20Ford Motor Co.
21Tenet Healthcare Corp.
22XL Capital Ltd.
23King Pharmaceuticals Inc.
24MGIC Investment Corp.
25Tyson Foods Inc.
Source: Glass Lewis & Co.



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