Pay
According to a new methodology developed by the Associated Press for measuring CEO compensation,

“The AP formula…adds up salaries, bonuses, perks, above-market interest on pay that is set aside for later and what companies estimated the present value to be of restricted stock and options awards on the day they were granted last year.

This differs from the summary compensation formula that the SEC requires companies to use in proxy statement…SEC formula is of less value to investors because it includes expenses that companies recognize during the year for current and previously awarded stock grants.

That tends to overstate in some cases, and understate in others, the specific pay decisions boards of directors took during the year.”

That makes Terry Semel the most highly paid exec out of the 386 companies of the S&P 500 analyzed—which may surprise Yahoo’s investors. Pay for the 386 CEOs totaled a cool $4.16 billion.

Even the exec whose compensation seemed to be on the same planet as you and I really wasn’t—Costco’s CEO James Sinegal’s salary is just $411,688, but that doesn’t count the 2.4 million Costco shares he owns, worth about $1.3 billion, or the options he has to buy 1.2 million more shares.

Perks
“Free beer! Free boat outings! Free taxes!“

How cool is that? Not only do you get paid millions of dollars, but then your company also turns around and the pays millions in taxes owed. I wonder, if the money paid in taxes is also considered compensation, does the company then pay the taxes on that ad infinitum?

These numbers should certainly inspire the younger generation to focus on a business career. After all, these folks make more than

• athletes—for a longer period of time and without the chance of injury;
• movie and rock stars—the odds of success don’t rest on the fickly taste of 14-34-year-olds;
• drug dealers—no bullets and you only end up in jail if you’re really, really arrogant or just plain stupid.

Not only that, but you don’t even have to be good at what you do!

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This entry was posted on Monday, June 11th, 2007 at 12:18 pm and is filed under Business info, Compensation, Leadership. You can follow any responses to this entry through the RSS 2.0 feed.
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