[i]Bonuses for CEOs of Indiana’s largest public companies jumped nearly 75 percent last year, even as the economy struggled and shareholder returns for all but four of the companies dropped.
In 2001, when recession and the Sept. 11 tragedies eroded investor confidence, many companies cut back such awards. Only $5.9 million in bonuses were issued by most of Indiana’s Fortune 1,000, down 25 percent from $7.9 million in 2000.
By 2002, those same companies had returned to form, The Star learned by examining Securities and Exchange Commission filings of 15 of the state’s 17 largest companies. More than $10.3 million in CEO bonuses were awarded, a sum that surpassed collective base salaries of $9.8 million.
CEOs at nearly half of those companies also saw pay raises last year that exceeded 26 percent.
“I’m really surprised,” said Margaret Shackell-Dowell, an assistant professor at the University of Notre Dame’s Mendoza College of Business who studies executive compensation. “You would suspect that with the unbelievable scrutiny by investors these days that companies would exercise more caution. The market has not improved. Profits remain down. Yet bonuses and pay for CEOs continue to rise.”
Such is the latest example of mounting evidence nationwide that counters a long-held notion – higher pay and perks such as stock options, pensions and incentive programs for top executives improves shareholder value.[/i]
[i]Corporation: Delta Air Lines
Date: August 28, 2003
Mullin came under fire after Delta disclosed that it had paid $17 million in 2002 executive bonuses and $25 million for bankruptcy-protected executive pensions in a year when it lost $1.3 billion.
Despite another dreary year in the local economy, CEO compensation at homegrown Rochester public companies increased an average 20 percent in 2002.It was a year that the region’s three most prominent companies implemented or continued re-engineered plans for how they pay their executives and managers
Douglas McCorkindale received $13.5 million in 2002-including $9.5 million gained through the exercise of stock options-to lead Gannett Co. Inc., the McLean, Va.-based company that owns the Democrat and Chronicle. That made him the highest-paid executive among the CEOs of public companies on Rochester’s Top 50.
In his first full year leading Bausch & Lomb Inc., Ronald Zarrella had the highest total compensation of any CEO at a locally based company, with $10.1 million in salary and restricted stock awards. Zarrella received $2.6 million last year in a so-called golden hello agreement with Bausch & Lomb to recoup forfeited compensation for leaving General Motors Corp., as well as for moving expenses.
Robert Gross received the biggest percentage increase in pay from 2001. The president and CEO of Monro Muffler Brake Inc. nearly doubled his pay to $1.5 million. On top of a $420,000 salary, he received a $258,552 bonus and $834,150 in other compensation including vested stock options and forgiveness of principal on a loan.
More than one-third of local public company CEOs won pay raises of 35 percent or more last year, during a period when investors and regulators took a magnifying glass to corporate governance and compensation at public companies.
Rolla Huff, whose Mpower Communications Corp. lost $94.4 million in 2002 and underwent bankruptcy, received a two-thirds hike in pay to $1.1 million, including a $624,097 bonus.[/i]
So who is supposed to stand up and where are they? I understand tax breaks and a lot of other things but this isn’t good for anyone but the people collecting the big checks. Tell me what makes this right and if it’s not right what should be done and by whom.
I’m sure others besides myself would like to know.