2011 is shaping up as the year of the $50 million-plus CEO.
Huge employment contracts, retention deals, stock-option gains, bonuses, and golden parachutes are creating big windfalls for incoming executives, current CEOs, and even those on their way out, according to a USA TODAY analysis of company filings with the Securities and Exchange Commission.
The latest: Walt Disney's Robert Iger, whose 2011 compensation is valued at more than $52 million, according to a Monday filing. That includes $31.4 million in pay and perks and $21.4 million from stock options and vested shares, Disney says.
Mega-pay packages aren't unprecedented. Companies frequently cite them as a price of doing business, and what's needed to attract and retain skilled managers. But at a time when executive pay is a sore point among rank-and-file workers, politicians and movements such as Occupy Wall Street, corporate governance experts say most aren't warranted.
"Corporate boards are tone deaf to the times, as are CEOs who justify this much compensation," says University of Toronto business school dean Roger Martin, author of “Fixing the Game: Bubbles, Crashes, and What Capitalism Can Learn from the NFL.” "Companies are fooling themselves if they say this is what's required to retain or attract talent."
Among other big paydays:
- Apple's Tim Cook — $378 million, including $376 million in restricted stock after replacing the late Steve Jobs.
- Qualcomm's Paul Jacobs — $50.6 million, including $28.9 million from stock options.
- Tyco International's Ed Breen — $68.9 million, including stock and option gains worth $52.4 million.
- J.C. Penney's Ron Johnson — $51.5 million, including $50 million in restricted shares after signing on in November.
Exit packages are even more lucrative. Nabors Industries will pay Chairman Gene Isenberg $126 million when he steps down, while Motorola Mobility CEO Sanjay Jha and Temple-Inlad CEO Doyle Simons are due more than $60 million once merger deals are finalized.
Compensation experts say corporate directors are wrestling with oversized pay plans, but many are hampered by deals hatched by other boards seeking new talent.
"Compensation committees are being more careful and saying they better have a good reason for doing things," says Paul Dorf of board consultant Compensation Resources.
Eleanor Bloxham, head of corporate watchdog the Value Alliance, says advisory shareholder measures are doing little to brake rising pay. "These kinds of things go on because too few people, especially institutional shareholders, are saying no."
Iger, for one, stands to make a lot more. Under a new contract, Disney is paying him at least $30 million annually through 2015, up 43 percent from his old base.
Disney says in its proxy that the new contract is designed to "secure access to Iger's leadership and experience for an extended period and to provide a path to succession with a smooth transition of his duties and responsibilities."
This story first appeared in USA Today.