Top Paid CEOs, from Rocky Humbert
Today's WSJ summarizes the decade's top 25 earners among CEOs. While there are many variables which affect CEO compensation, investors should note the troubling absence of any obvious relationship between long-term stock performance and CEO pay. For students of free enterprise and tax policy, there are many questions raised by these findings. Other studies involving the entire S&P 500 universe have shown similar conclusions.
Thought experiment: would the stock returns have been any different if the CEO compensation dropped a "0"? (i.e. $400 million -> 40 million)
comp million$
stk return
leh
457
1.1
nvr
451
1.6
dell
454
34
cdnt
481
51
csco
393
71
iac
1143
78
ctywide
529
81
capone
568
86
tgt
342
101
clp
358
137
nbr
518
141
c
361
143
fst
385
148
qcom
437
192
utx
448
253
yhoo
490
279
oracle
1836
317
sbux358
333
ftx
332
479
fnf
430
548
unh
469
707
oxy
857
974
aapl
749
1171
chk
332
1179
xto
351
3559
Jim Lackey writes:
There are big list of tells we can use:
1. Dollar a year man. Quickly moves to slash burn and sell the company to no benefit of current holders. Look to the last job/ company he held and where the old management team is. That's where the assets are going.
2. X company man. GE six sigma. Look for them to run the company into the ground with focus on cost cuts firing the bottom 10% "creating shareholder value". Meanwhile their competitors are hiring all those fired with a contact or client book and quickly signing deals. Making money vs reducing costs.
There are many others and to "get the joke" one must watch "Charlie Wilson's War".