So much for Corporate America lightening up on those compensation totals. With public companies in the middle of filing their annual reports, the numbers have been moving up, in some cases quite a bit. Based on early returns, the median pay in 2012 was $9.7 million, according to a USA Today analysis, which is an 8 percent increase from a year earlier. (Look for further updates as more companies file over the next two months.) Locally, the $37 million package for Disney CEO Robert Iger includes $17.3 million in stock and options awards and a $16 million bonus. DirecTV CEO Michael White pulled in $17.9 million, a jump of 212 percent from 2011. Then there's Occidental Chairman Ray Irani, who was edged out as CEO a few years back after shareholder groups objected to his exorbitant pay (almost $900 million over 10 years), but who still managed to make $46 million in 2012, including a $15.8 million incentive award (can anyone tell me why such a wealthy, accomplished man needs an incentive to do the job?). Stephen Chazen, the current CEO who Irani is trying to dump, received $28.7 million. The thing is, lots of CEOs are making big money, largely because of the Wall Street rally. Their contracts typically provide bonuses that are based on how well their stocks perform. Also, many of them have been collecting stock options that are a lot more valuable now that the share prices are so much higher. "I'm shell-shocked. I can't believe this can go on," says Vanguard founder John Bogle, who is a long-term critic of CEO pay.From this week's Business Update on KPCC:
Steve Julian: Perks as well?
Mark Lacter: Yes, things like free use of the corporate jet and free accounting services, the sort of excess that rubbed investors the wrong way some years back when stocks were going way down. But stocks are no longer going way down, so maybe they figure the coast is clear. Of course, all this is happening at a time when 12 million or so Americans remain out of work. So, there's still a real disconnect between what happens in Corporate America, and what happens in Main Street America.
From USA Today:
Investors may have become jaded with such large jumps in CEO pay, but it's hard to look past raises that contrast with lagging stock prices, says Paul Hodgson, an independent corporate governance analyst. "There are plenty of (pay packages) in the danger zone," he says. Some CEOs scored big pay packages and raises, even as employees lost jobs and investors suffered big losses. Meg Whitman, CEO of Hewlett-Packard, saw her pay package hit nearly $15.4 million in 2012 as investors suffered a 46% decline in total return during the year. Meanwhile, in mid-2012, the company announced plans to lay off 27,000 workers, or 8% of its workforce. In its regulatory filing, HP justified the payout, saying, "The independent members of the Board determined that Ms. Whitman had exceeded her objectives."