 |
This Just In…
While CEOs rake in billions, some shareholders lose value
July 30, 2010
Throughout the past decade, few some of the country’s best-paid CEOs oversaw significant stock gains for their shareholders, The Wall Street Journal reports. Topping the list of best-paid executives of public companies was Larry Ellison, founder and chief executive of software maker Oracle Corp. Ellison received $1.84 billion in compensation, according to the newspaper’s analysis of CEO pay. Next was Barry Diller, who took home roughly $1.14 billion from IAC/InterActive and Expedia.com, the online travel site that IAC spun off in 2005.
Following Diller were Ray Irani, CEO of Occidental Petroleum Corp., at $857 million; Apple Inc.’s Steve Jobs, with $749 million; and Richard Fairbank, CEO of Capital One Financial Corp., at $569 million. In the past 10 years, Oracle’s stock price has tripled, while Apple shares have soared nearly 12 times over, the Journal reports. But shareholders of another tech giant — Dell, Inc. — have lost 66 percent, even as CEO Michael Dell received $454 million. Four of the ten highest-earning executives ran companies whose shareholders lost money: IAC/InterActive, Countrywide, Capital One, and Cendant Corp.
The report comes at a time when stock options are a big factor in CEO compensation, but also when critics are saying that the financial incentives sometimes push executives to take risks that temporarily lift the stock price but hurt long-term share value.
The disparity between fortunes of CEOs and their shareholders “suggests there’s a fair amount of pay without performance,” Harvard Law Professor Jesse Fried told the Journal. The financial-reform bill that President Barack Obama signed last week gives shareholders a periodic, nonbinding vote on executive-pay plans, and requires companies to disclose the disparity between CEO pay and that of other employees. — Greg Beaubien
Comments
No comments have been submitted yet.
Post a Comment
Editor’s Note: Please limit your comments to the specific post. We reserve the right to omit any response that is not related to the article or that may be considered objectionable.