As you read on, keep saying to yourself: "I want to serve my country. I want to serve my country. I want to serve my country."
Under the headline, "Pay for No Performance," The Wall Street Journal Thursday described how private sector executives receive big salaries and big bonuses even when their companies perform poorly. When Gilbert F. Amelio, former CEO of Apple Computer Inc., was fired last summer, he landed on his feet with $6.7 million in severance pay and $2 million in salary and bonuses for his last 12 months on the job (Amelio was CEO for only 17 months).
"CEOs were supposed to get top dollar only when they got results. Now many are getting top dollar--no matter what the results," the paper reported.
According to a William M. Mercer Inc. survey done for The Journal, private sector executive compensation--including salary, bonuses, stock-option gains, long-term incentive payments and the value of granted stock--increased 29.2 percent last year. The average compensation package for CEOs was $3,093,018 in 1997, up from $2,375,620 the previous year, according to the Mercer survey.
Federal executives this year can earn no more than $151,800, the Executive Level I pay level. Members of the government's Senior Executive Service were given an average 2.8 percent pay raise for 1998.
The AFL-CIO on Thursday also released a report on CEO pay, "Too Close for Comfort: How Corporate Boardrooms are Rigged to Overpay CEOs," along with a Web site, Executive PayWatch, that tracks executive salaries.
"Many CEOs are reaping huge stock option gains merely because their company is riding the bull market, not because of their stellar managerial abilities. And only a quarter of the huge option grants awarded to CEOs in 1995 contained any sort of link to performance," the AFL-CIO reported. "CEOs are receiving big pay packages even if the company is going down the drain."
Both reports said that new CEOs are being granted sweet deals by company boards even if performance isn't up to par.
Examples of executive pay include:
- Lockheed Martin's Vance Coffman took home $2,532,669 in salary, bonuses, and other compensation last year, in addition to $5,730,802 in stock option grants and $3,008,126 in unexercised stock options from previous years.
- Boeing's Philip Condit raked in $5,620,855, on top of $10,532,637 in unexercised stock options.
- Michael Eisner, Disney's top executive, pulled in $10,653,820. And he has a whopping $590,579,999 in unexercised stock options.
- General Electric CEO Jack Welch Jr. earned $8,800,797 in salary and bonuses, and $18,783,000 in stock option grants. He has $182,243,818 in unexercised stock options.
The Clinton administration is looking at ways to tie federal executives' pay to their performance. One administration proposal would allow executives to earn up to the Vice President's salary, which is $175,400, if they perform at exceptional levels.
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