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CEO pay eclipses ridiculous

By ROBERT TRIGAUX
Published April 24, 2006


THE CEO HALL OF SHAME
$1.6-billion
William McGuire,
UnitedHealth Group
Exercised just $114.5-million in options in 2004, but held more than $1.6-billion in unexercised options at the end of 2005.

$400-million
Lee Raymond,
ExxonMobile Corp.
That's just his retirement package. Last year, he got $6,000 an hour, $144,000 a day or about $51-million annually.


$180-million
Carly Fiorina, (ex-CEO)
Hewlett-Packard
Sure, she got that much over five years, but was handed $21.6-million in cash as severance pay for uninspired performance and declining stock price.


$83-million
Henry A. McKinnell,
Pfizer Inc.
How much he gets in a lump-sum pension. Or he can settle for $6.5-million a year.



$63-million
Ray Irani,
Occidental
One of the top paycheck winners in 2005 for - surprise - running an energy company. Filled your gas tank lately?


Rumor has it that chief executive officers still put their pants on one leg at a time. But that sounds positively quaint now that CEOs at larger U.S. corporations on average earn $430 for every $1 earned by the average U.S. worker.

Twenty-six years ago, CEOs received an average of $10 for every $1 earned by a U.S. worker.

Somewhere in that quarter-century, something went terribly wrong. CEO paychecks have morphed from compensation tools designed to motivate management to gluttonous buffets where executives graze on cash, bonuses, incentives, stock options, retirement packages, free cars, subsidized housing, corporate apartments, personal jets, free tax consulting, elite entertainment and dining on corporate tabs and personal security services.

All this is pretty much paid for by shareholders. And all of it is obscurely described, if at all, in complex regulatory filings that befuddle even sophisticated shareholders seeking basic answers about CEO pay.

The media would not continue to condemn such remarkable greed if CEOs did not continue to soar to new compensation heights.

At what point did the notion of wealthy get upped to irrational excess? Some pay packages are at levels that would make gold-obsessed Auric Goldfinger and even once-cash-bloated Saddam Hussein blush.

Five recent candidates most deserving of the CEO Hall of Shame appear on the list below. But dozens of other overpaid executives could easily join their ranks.

William McGuire of UnitedHealth Group amassed one of the largest stock option fortunes of all time. Unrealized gains on these options are valued at $1.6-billion, making McGuire the billion-dollar man. It has been alleged that the timing of McGuire's awards may have been back-dated to make his options more profitable. UnitedHealth says it is looking into it.

Lee Raymond of ExxonMobil is CEO Public Enemy No. 1 these days since his astonishing retirement and pay packages are coming to light at the same time the nation is struggling with gasoline prices heading north of $3 a gallon. Are we paying for the high price of oil or simply digging deeper to cover Raymond's $144,000-a-day paycheck?

It was good news when Carly Fiorina broke the glass ceiling for women to become CEO of a major tech company. But it was bad business for Fiorina to leave Hewlett-Packard with $180-million over five years and a big going-away cash gift for a mediocre job of running the company.

Pfizer CEO Hank McKinnell ranks tops in a new study dubbed "CEO Golden Years: The Top 25 Largest CEO Pensions," done by the AFL-CIO and the Corporate Library, a corporate governance research group. Is McKinnell really worth $6.5-million a year after he retires? And why should CEOs get such enormous payouts just as Corporate America sheds its obligations to provide pensions to its workers?

Finally, there's Ray Irani at Occidental, another energy business. He made nearly $173,000 a day, $7,200 an hour or nearly $120 a minute last year. Nobody's worth that.

Shame, shame, shame.

Still, CEO sacrifices are real, if rare. US Airways chief Doug Parker declined a $770,000 bonus to acknowledge the pain many of his employees have endured. At struggling GM, CEO Rick Wagoner accepted a 50 percent pay cut to signal his intent to avoid corporate bankruptcy. Robert S. Miller Jr. of bankrupt auto parts supplier Delphi Corp. cut his salary to $1 a year after asking for cuts of up to 40 percent from hourly workers.

But they are the exceptions. A recent Corporate Library analysis shows CEOs at 11 of the largest U.S. companies were on track to receive a total of $865-million in pay, despite their presiding over an overall loss of $640-billion in shareholder value.

You know what they used to say.

A billion here, a billion there, and pretty soon you're talking about real money.

Of course, that famous remark, attributed to the late Sen. Everett Dirksen, R-Ill., was about excessive spending by the federal government. Dirksen would have been outraged to know the phrase is now relevant to the pay of some individual CEOs.

Let's review.

Unprecedented CEO pay packages. Growing lack of accountability. An American public numbed and feeling helpless by the corporate machinery of self-enrichment.

By my rough calculation, CEOs like Occidental's Irani and ExxonMobil's Raymond earn more than $100 each time they put their pants on. One leg at a time.

Nice work if you can get it.

Robert Trigaux can be reached at trigaux@sptimes.com or 727 893-8405.

CEO Hall of Shame

$1.6-billion

William McGuire, UnitedHealth Group

He exercised just $114.5-million in options in 2004, but held more than $1.6-billion in unexercised options at the end of 2005.

$400-million

Lee Raymond, ExxonMobil Corp.

That's just his retirement package. Last year, he got $6,000 an hour, $144,000 a day or about $51-million annually.

$180-million

Carly Fiorina, (ex-CEO) Hewlett-Packard

Sure, she got that much over five years, but was handed $21.6-million in cash as severance pay for uninspired performance and declining stock price.

$83-million

Henry A. McKinnell, Pfizer Inc.

How much he gets in a lump-sum pension. Or he can settle for $6.5-million a year.

$63-million

Ray Irani, Occidental

One of the top paycheck winners in 2005 for -- surprise -- running an energy company. Filled your gas tank lately?

[Last modified April 22, 2006, 17:07:02]


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