So far this year, HerbalifeCEO Michael Johnson is the highest paid of all CEOs, based on a just-released compensation survey by GMI Ratings.
According to the corporate governance research firm, Johnson’s total compensation, including the realized gain on its options, was $89.4 million.
The next closest was IBM’s then-CEO Sam Palmisano at $63.2 million, followed by Tyco’s Edward Breen at $63 million. The list was rounded out by Nuance Communications CEO Paul Ricci at $40.9 million.
Would Johnson have ranked so high if the survey had been taken after the company’s stock’s tanking in recent days — after hedge fund manager David Einhorn raised a few questions about the company on its earnings call?
A GMI spokeswoman told me: “It’s safe to say Mr. Johnson’s holdings are currently taking a hit but these values are for stock vested and options exercised as of the end of December 2011. The CEO has disposed of some shares since then, so he has already had the opportunity to profit from realized equity.”
The report adds: “Mr. Johnson exercised more than 1.8 million stock options in 2011 for a profit of almost $77 million. Many of these options were awarded during 2003-2005 when Herbalife’s shares traded below ten dollars. However, total shareholder return at Herbalife is up nearly 292 percent over the last five years and 870 percent over the past three-year period. Mr. Johnson’s vested stock realized a profit of more than $7.5 million, combining with the option exercises for a total of more than $84 million in equity profits for 2011. He is the beneficial owner of 3.6% of Herbalife stock as of February 2012 and was granted additional equity in May and August of 2011 valued at nearly $20 million in total.”
My take: Good work if you can get it.
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