The advance teaser for Equilar\’s 2010 Bonus Plan Design report is out today, with plenty of statistics that should cheer populist revolutionaries and disappoint current or wannabe captains of industry. Total CEO bonuses fell 21.9 percent in FY 2009, though the numbers still aren\’t small: median bonus pay was a rather hefty $689,000 in 2009, though it was an even steeper $882,105 in 2008.
Unsurprisingly, the financial industry, much of it under TARP\’s house rules, took a big knock in the report, with median payouts declining 51.1 percent. The technology industry, however, took the dropoff crown: their bonuses fell 59.2 percent. The only unscathed industries were healthcare, which posted a 14.7 percent gain, and services, which posted a 20.8 percent gain.
So bonuses are definitely down, but hey, it could be worse: you could be one of the 26.1 percent of CEOs who received not a penny of bonus money in 2009. Yeah, we know. World\’s tiniest violin. But that\’s an 8.3 percent rise from 2008, which is pretty sizable.
At the end of the day, close to three-quarters of CEOs are still getting bonuses, most of them far larger than an average American\’s salary. But no matter how you feel about the President\’s and the SEC\’s position on the matter, you have to admit that their pressure is working– for the moment, anyway.
Request the full report here.
While a major post-recession trend has been the shifting of stock option grants to restricted stock, many Silicon Valley executives are still getting a fair amount of options, according to today\’s Wall Street Journal. Oracle\’s Larry Ellison leads the pack, with a whopping $57.4 million of options awarded in 2009. That\’s more than seven times the options granted to #2 on the list, Cisco CEO John Chambers. (We see many more yachts in Mr. Ellison\’s future.) Oracle also led the pack in total option grants given to executives, by a pretty wide margin.
In the third-place slot was NetApp, which awarded $7 million in options to new CEO Thomas Georgens. This is at least partially attributable to the new contract it had to work out when Georgens was appointed to the slot. Either way, it seems to be evidence that for some of the biggest Valley firms, restricted stock isn\’t looking as necessary anymore.
One of the big conclusions drawn by Equilar in their 2010 General Counsel Pay report was that GCs who report to the CEO make significantly more than their counterparts who don\’t. Rees Morrison examined this disparity, and came up with a few theories:
- Direct reporters are more likely to be older, have more experience, and therefore, command a higher salary.
- Direct reporters may lead numerous functions, while non-direct reporters may only lead one or two.
- A hierarchy has emerged in big corporations: one out of three GCs are non-direct reporters, meaning that they\’re at least one rung below someone else, and therefore paid less.
These facts may be cold comfort to the GC who\’s making significantly less than his or her directly-reporting counterpart. If that\’s the case, they may want to keep in mind an Equilar finding from last year: CEOs promoted internally tend to make less than those who switch companies to become CEO. If this also holds true for the GCs who directly report to them, a job change might start to seem like a good idea.
This is a tough time to be transitioning from the world of banking to the world of politics, as the latter is gaining plenty of ground from the populist move of decrying the former. Harold Ford, the former Tennessee congressman who is considering challenging Kirsten E. Gillibrand for a New York Senate seat in the Democratic primary, is now under fire for the pay he received in the interval between political jobs, when he worked at Merrill Lynch. The Times cites two sources who said that Ford\’s contract guaranteed him $2 million per year in salary, a significantly higher level of base pay than that of Merrill\’s CEO, Stanley O\’Neal, who took home only $700,000 in base salary in 2007. (Don\’t feel too badly for O\’Neal, however; he netted another $18.5 million in cash and $27 million in restricted stock as his 2007 bonus.)
Even for politicians who\’ve ended their relationships with these former employers, one-time bank affiliation is going to be a hot-button issue for years to come, and no amount of impartiality claims will quench speculation that a politician is a mere shill for his or her former bank. For those considering leaving Wall Street for Capitol Hill, it\’s something that\’s worth keeping in mind.
