AllThingsD » executive compensation

Apple's Cook Tops the List of Highest-Paid CEOs

Scott Thurm — Mon, 21 May 2012 17:23:48 +0000

Steve Jobs left big shoes. Apple Inc. is betting $378 million that Tim Cook is the right guy to fill them.

That is the value of the annual pay package Mr. Cook was awarded when he was named Apple chief executive last August, about two months before Mr. Jobs died. Nearly all of the compensation stems from a grant of one million shares of restricted stock, valued at $376.2 million, based on Apple’s stock price at the time.

Mr. Cook’s 2011 compensation is the highest recorded in The Wall Street Journal’s annual CEO pay survey since at least 2006, when the Securities and Exchange Commission changed its rules for reporting executive pay.

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HP CEO Whitman Earned One Dollar Plus $16 Million in 2011

Arik Hesseldahl — Fri, 03 Feb 2012 15:27:02 +0000

Hewlett-Packard released its annual proxy statement this morning, which, among other things, gives a look at what its top five executives made last year. Here’s the rundown:

CEO Meg Whitman, who upon becoming CEO agreed to take an annual base salary of $1, received more than $16 million worth of stock awards. Add on another $372,598 in other compensation, and the total value of her package was north of $16.5 million. Much of that other compensation stemmed from the period when Whitman was a director on HP’s board, and before she was CEO.

Under her employment contract, Whitman received an option to purchase 1.9 million shares of HP stock at a strike price equal to the value of the share price on the date of the grant, and subject to vesting requirements over time. As of today, 1.9 million shares would be worth almost $55 million. Whitman, the filing says, was the only one among the company’s named executive officers to receive an options award during 2011.

The filing also shows that CFO Cathie Lesjak made a base salary of $825,000, plus $9.3 million in stock-based compensation, $679,000 in incentive pay and $101,500 in other compensation, for a total of more than $11 million.

Todd Bradley, executive vice president and head of the Personal Systems Group, the division that HP briefly considered spinning out last year, made a base salary of $850,000, plus $9.3 million in stock-based compensation. He received $464,457 in incentive pay, plus $105,000 in other compensation, for a total just shy of $10.7 million.

Vyomesh “VJ” Joshi, the executive president and head of the Imaging and Printing Group, got an $850,000 salary, too, and nearly $8 million in stock awards, plus $638,355 in incentive pay, for a total of $9.8 million.

Shane Robison, the former chief strategy officer who retired last year, received a base salary of $781,250, plus stock awards worth $7.6 million and $606,506 in incentive pay, for a total of $9 million.

Finally, we have a full accounting of what former CEO Léo Apotheker made for his 11 months of service at HP’s helm. The full amount was $30.4 million. The precise amount had been the subject of some guesswork based on less-than-complete HP filings made around the time of Apotheker’s departure. The filings netted for HP a dubious award for “Worst Footnote of the Year” over at Morningstar’s Footnoted blog. My best guess had been in the $28 million to $33 million range.

Apotheker’s compensation breaks down like so:

$1,152,770 in base salary.
A $6.4 million bonus, of which $4 million was a signing bonus when he joined HP, and $2.4 million paid under the terms of his separation agreement.
Stock awards worth $17,660,759.
$5.2 million in “other compensation.” Within that was $2.9 million in relocation expenses related to Apotheker’s move from France to California and back; $1.7 million in “miscellaneous,” the majority of which, as explained in a footnote, was a “reimbursement for foregone non-competition payments that would have otherwise been payable by his former employer,” which refers to the software company SAP, where Apotheker was co-CEO.
Another $25,000 representing his personal use of HP aircraft.

How SuccessFactors Signaled It Was on the Block

Arik Hesseldahl — Fri, 09 Dec 2011 19:46:04 +0000

Lots of us were surprised by the weekend deal in which software giant SAP took over the cloud-based human resources software concern SuccessFactors for $3.4 billion. But had you been paying close attention to SuccessFactors’ SEC filings, you might have seen something coming.

It turns out there were some subtle signals that the company was on the block. Theo Francis of Footnoted, the Morningstar-owned blog that follows the nitty-gritty details of SEC filings, notes a classic sign of a pending deal — increases in executive compensation and an apparent preoccupation with change-of-control provisions.

Senior executives often work these provisions into their compensation deals to ensure they don’t leave any money on the table or lose their equity in case a company is sold, merged or acquired. Often any unvested equity or options vest fully.

Francis notes that in July 2010, SucccessFactors added change-of-control provisions to its compensation plans without ever having given a thought to the subject before. Also, severance provisions were revised. For example: CEO Lars Dalgaard’s contract grants him double his annual salary and a target bonus should he lose his job after an acquisition. This comes on top of a $90,000 boost in his annual base salary to $540,000, plus an annual bonus that maxes out at twice that and a pot of restricted stock awards, worth about $6 million, all of which vest in the event of a deal.

All told, Dalgaard could walk away with almost $17 million when the deal closes. You can read more about all this in the original April 22 filing here.

Well, That Was $71 Million Well Spent … Time to Sell Off Some More of That Google Stock

John Paczkowski — Fri, 08 Jun 2007 23:28:32 +0000

[ See post to watch video ]

Our Market Share's Getting Smaller. … And Terry's Pay Package is Getting Laaaaarrrrrger.

John Paczkowski — Fri, 08 Jun 2007 07:01:16 +0000

Yahoo’s compensation committee certainly has an interesting formula for executive-salary calculations–one based on an inverse relationship between job performance and financial reward. How else to explain CEO Terry Semel’s pay package for 2006–$71 million, despite a 60% decline in Yahoo’s net income and 35% drop in stock price. $71 million. And for what? A year of slowing revenue growth, slumping shares and staff defections, capped by a “Peanut Butter Manifesto” that Semel (shown below), didn’t even write.

No wonder two independent proxy-advisory firms are urging Yahoo shareholders to vote against the re-election of the company directors responsible for Semel’s compensation. “It appears that CEO Semel is rewarded when times are good … and when times are bad,” said Institutional Shareholder Services.

Especially when times are bad. According to PROXY Governance, Semel’s pay package is 926% above the median paid to CEOs at peer companies. And if you think that’s outrageous, consider this: the $71 million Semel banked in 2006 is much reduced from the $230.6 million he earned in 2005. But Yahoo doesn’t see a problem with it. “Under Terry’s leadership, the company has a clear strategy to create stockholder value, and the company is well positioned to capitalize on the substantial growth opportunities ahead for the Internet,” said Yahoo spokeswoman Helena Maus. “It is also worth noting that Terry does not receive any perks, pensions or other retirement benefits, severance benefits, or any other deferred compensation.” Right … because adding a country-club membership or a car allowance to that $71 million would be a little too crass, huh.

“He’s tremendously overpaid,” said compensation expert Graef Crystal. “If this was an IQ series (ranking), his first name would be Albert (Einstein). He’s off the map.”

How about a foot rub from the board, Ed?

John Paczkowski — Mon, 30 Apr 2007 22:06:56 +0000

What's This 'Ed Whitacre Exit Package Recovery Fee' Doing Under Miscellaneous Charges?

John Paczkowski — Mon, 30 Apr 2007 15:29:36 +0000

Looks like Verizon Communications Chief Executive Ivan Seidenberg’s brief turn as the emblem of America’s out-of-control CEO pay machine has ended. When AT&T CEO Edward “The-Internet-can’t-be-free” Whitacre retires later this spring, he will receive an exit package nearly eight times that of Seidenberg’s $20 million gilded parachute. According to The Wall Street Journal, Whitacre (shown right, chuckling at your phone bill) will depart AT&T with one of corporate America’s biggest retirement packages, valued at a jaw-dropping $158.5 million. Padding the deal, a list of “other benefits” is certain to turn shareholders’ stomachs. Among them: $1 million a year for three years for work as a consultant to the company during his retirement, $75,000 to cover his country-club fees, $24,000 in annual automobile benefits, $6,500 to cover “home security” each year and access to AT&T’s corporate jet for 10 hours a month. Oh, and $15,600 a year in “tax assistance.”

This, despite the fact that AT&T’s share price has not fared as well as those of its rivals. “Given the company’s total stock return, this amount is very excessive,” Alexandra Higgins, the Corporate Library’s compensation analyst, told the Los Angeles Times. “In our opinion, there’s no need for this waste of shareholder money. Other companies are seeing this and are going to try to match it. And that just increases the levels of executive compensation. When does it end?”