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What the Boss Makes: CEO pay getting more ire from shareholders
http://www.siliconvalley.com/ci_28568465/what-boss-makes-ceo-pay-getting-more-ireJohn Hammergren no longer has a company chauffeur to drive him around. Which is not to say he's hurting: He earned $25 million running pharmaceutical distributor McKesson last year, making him the sixth-highest paid CEO in the Bay Area.
If he lost his job tomorrow, he could return home to his Orinda mansion with a $114 million pension and an estimated $140 million in accelerated stock awards, along with other severance benefits such as lifetime secretarial services.
But his annual pay package has declined steadily in recent years, according to What the Boss Makes, the annual Equilar Silicon Valley CEO Pay Study conducted for the Bay Area News Group, and his parachute is not as golden as the record-breaking deal his board once promised. Shareholders insisted on scaling back.
Grumpy investors have been sending messages of frugality not just to San Francisco-based McKesson, one of America's oldest companies, but to maturing tech companies such as Oracle, Salesforce.com and Yahoo, whose executives -- Larry Ellison, Marc Benioff and Marissa Mayer -- rake in even more big bucks each year. Occasionally, a company listens.
If he lost his job tomorrow, he could return home to his Orinda mansion with a $114 million pension and an estimated $140 million in accelerated stock awards, along with other severance benefits such as lifetime secretarial services.
But his annual pay package has declined steadily in recent years, according to What the Boss Makes, the annual Equilar Silicon Valley CEO Pay Study conducted for the Bay Area News Group, and his parachute is not as golden as the record-breaking deal his board once promised. Shareholders insisted on scaling back.
Grumpy investors have been sending messages of frugality not just to San Francisco-based McKesson, one of America's oldest companies, but to maturing tech companies such as Oracle, Salesforce.com and Yahoo, whose executives -- Larry Ellison, Marc Benioff and Marissa Mayer -- rake in even more big bucks each year. Occasionally, a company listens.
This is at least in theory good, but I don't like the focus on "CEO pay"; it's kind of a distraction. Larry Ellison made $67 million last year. Yes, that's too much. But during that same year Oracle distributed 48 cents per share to 4.5 billion shares outstanding, which comes to $2.16 billion. That's where the money is. Futzing around with CEO pay, while emotionally satisfying, doesn't address the structural problem.
