Boardrooms and compensation committees continue to grapple with heightened scrutiny and controversy surrounding CEO pay packages. In the wake of the “golden parachute” outrage of the financial crisis, payouts in the form of stock options have become a favored form of compensation for public companies.
Options typically don’t vest for three to four years, which helps prevent a CEO from taking home a windfall payout in the event he or she is prematurely ousted because of poor performance, scandal, or some other reason. But some executives are fortunate enough to have huge options holdings vesting this year. Compensation research firm Equilar analyzed approximately 400,000 filings for more than 6,000 executives to see which ones have the most stock options vesting before the end of this year. This information is being presented for the first time on CNBC.com.
So which CEOs survived the turmoil, and are now in line to reap the rewards of a massive stock option cash-out? Click ahead and find out.
By Jesse Bergman
14 September 2011
President, Operations and Sales of Sirius XM Radio
Value of options vesting in fourth quarter 2011: $7.5 million
Base salary: $1.1 million
Cash bonus: $1.5 million
Meyer joined Sirius XM in May 2004 after leaving the consulting firm Aegis Ventures. At number 10 on this list, his $7.5 million in vested fourth-quarter options are still worth more than 36 times that of similar executives that Equilar analyzed (whose average fourth-quarter vested options were worth roughly $207,000).
CEO, Anadarko Petroleum
Value of options vesting in fourth quarter 2011: $8.0 million
Base salary: $1.6 million
Cash bonus: $3.0 million
One of the richest executives in the oil and gas industry, Hackett was named Anadarko Petroleum’s CEO in December 2003. The company’s stock has climbed more than 200 percent since that time, significantly outpacing the S&P 500, which is up just 11 percent over the same period.
Value of options vesting in fourth quarter 2011: $9.3 million
Base salary: $700,000
Cash bonus: $1.3 million
Koehler began his career with the global technology company NCR in 1975, and would later lead Teradata’s spin-off from NCR in 2007. Under Koehler’s reign, the company’s shares have risen roughly 87 percent, making his options significantly more valuable than his base salary.
CEO, Precision Castparts
Value of options vesting in fourth quarter 2011: $10.4 million
Base salary: $1.4 million
Cash bonus: $1.6 million
Donegan was named CEO of Precision Castparts, a Portland, Ore.-based metal products manufacturer, in August of 2002. Donegan came to the company after working at General Electric for roughly seven years.
CEO, Southern Union
Value of options vesting in fourth quarter 2011: $10.7 million
Base salary: $1.0 million
Cash bonus: $3.25 million
The son of a self-made cosmetics mogul, Lindemann has held the CEO title at Southern Union, one of the nation’s largest natural gas pipeline companies, for more than two decades. Over that time, the stock has seen gains of more than 1,200 percent.
Chairman, Regeneron Pharmaceuticals
Value of options vesting in fourth quarter 2011: $11.5 million
Base salary: $100,000
Cash bonus: N/A
Vagelos has served as chairman for Regeneron Pharmaceuticals since January 1995. The value of his options vesting in the fourth quarter are worth more than 100 times his base salary, which at $100,000 is relatively diminutive compared to other CEOs on this list.
CEO, Coca-Cola Enterprises
Value of options vesting in fourth quarter 2001: $12.0 million
Base salary: $1.2 million
Cash bonus: $3.5 million
Prior to joining Coca-Cola Enterprises, Brock served as COO of Cadbury Schweppes. Brock has served as its CEO since April 2006, and shares of the company have risen roughly 30 percent over that time.
CEO, Liberty Media
Value of options vesting in fourth quarter 2011: $13.1 million
Base salary: $1.5 million
Cash bonus: $4.3 million
A former CFO at Microsoft, Maffei became CEO at Liberty Media in 2006. Liberty Media owns the Atlanta Braves, QVC, Starz, and Live Nation.
Value of options vesting in fourth quarter 2011: $26.1 million
Base salary: $1.28 million
Cash bonus: $3.5 million
Schultz’s $26.1 million in options vesting in the fourth quarter are worth more than five times the value of his annual salary and cash bonus combined. Shultz rejoined Starbucks as CEO in 2008 (after an eight year hiatus), receiving a large chunk of options upon his arrival. Shares have rallied roughly 340 percent since then.
Sirius XM Radio CEO (SIRI)
Value of options vesting in fourth quarter 2011: $39.9 million
Base salary: $1.5 million
Cash bonus: $8.4 million
A former Viacom (VIA) executive, Karmazin was awarded 120 million options in June 2009, thanks to an extension of his employment agreement at Sirius XM Radio. Since then, shares of the company have risen roughly 375 percent. His options partially vest each Dec. 31, and are set to fully vest after four years.