The (big) bucks stop here
Several weeks ago, the Wall Street Journal released its annual survey of CEO compensation, analyzed by the Hay Group management consulting firm. (Full disclosure: Milton L. Rock, chairman of Family Business Publishing Company, was the managing director of the Hay Group until Hay was sold in 1984.)
The Journal survey assessed salaries, bonuses, long-term incentives, and grants of stock and stock options for CEOs of 200 publicly traded U.S. corporations. The survey found that the median compensation for the CEOs studied declined 0.9%, to $6.5 million. The highest-paid CEO surveyed is Ray R. Irani of Occidental Petroleum Corp., who took home $52.2 million.
Of the family-controlled public company leaders on the Journal list, Paul Jacobs, the second-generation CEO of Qualcomm, is the top name (No. 11). He received $16.8 million in compensation for 2009, a 6.8% decline from his 2008 pay. The next-highest-paid CEO of a family-controlled firm is Daniel Amos, the second-generation leader of Aflac (No. 31). Amos's 2009 compensation -- nearly $13 million -- increased by 22.4% over the 2008 figure.
Near the bottom of the Journal's list is Donald Graham, third-generation CEO of the Washington Post Co. (No. 193), who received only $400,000, plus a $12,740 contribution to his 401(k) retirement plan. As the Associated Press noted in a March 24 article, Graham's pay declined from $811,960 in 2008 because the Post CEO refused a bonus in 2009. The AP report noted:
The Post's board of directors believes Graham is underpaid, according to [a Securities and Exchange Commission] filing, but Graham wanted his salary to remain at $400,000 -- the same as in 2008.... Unlike most CEOs, Graham doesn't get annual grants of stock options or other similar incentives because he is the company's largest individual shareholder.
The Post Co.'s flagship publication, the Washington Post, is facing declining advertising revenues, a problem plaguing the entire newspaper industry. Yet at another family-controlled newspaper company, the New York Times Co., non-family CEO Janet Robinson took home total compensation of $6.2 million in 2009. The Times Co.'s chairman and publisher, Arthur Sulzberger Jr. -- a member of the controlling Ochs-Sulzberger family -- received $5.9 million, according to Editor & Publisher, a trade publication. (Robinson and Sulzberger's salaries were not included in the Wall Street Journal survey.) According to the E&P report:
The majority of both executives' compensation was tied to financial targets set by the company. Robinson and Sulzberger's salaries were less than their target but they both exceeded the mark with their annual bonuses: Robinson had an annual bonus target of $1 million and actually made $1.35 million, while Sulzberger had a target of $1.087 million and actually made $1.451 million. Robinson was compensated $893,750 under a four-year long-term incentive program and $1.4 million in stock options. Sulzberger was compensated $962,500 and $1.085 million, respectively.
The E&P report also noted that in 2009, the Times Co. temporarily reduced salaries of non-union employees at the Media Group by 5%; the Newspaper Guild voted to reduce salaries by 5%; and executives took a 5% cut in their base salaries.
The news about Robinson and Sulzberger's compensation did not sit will with members of the Boston Newspaper Guild, the largest union at the Boston Globe, which is owned by the Times Co. Dan Kennedy, author of the Media Nation blog, quoted a draft of a letter to the Times CEO and chairman from the Boston Newspaper Guild, the largest union at the Globe. According to Media Nation, the draft of the letter said:
We were astonished to learn that the two of you received more than $10 million in stock awards and options in 2009. During the year for which you were so richly rewarded, the 600 members of the Boston Newspaper Guild gave back almost the same amount in pay and benefit reductions --$10 million, to be exact -- after you threatened to close our newspaper, lay off hundreds of people, and strip Massachusetts of its largest newspaper.... [T]he recent SEC filings make it look like almost all of our sacrifices went to pay the two of you.