GMI Ratings, a corporate governance watchdog, has released the results of its latest survey of CEO pay for fiscal 2010. It found that CEO compensation for companies in the S&P 500 rose by a median of 36.5 percent. Three of the 10 highest paid CEOs work in the health-care industry, including the top two.
According to the GMI survey, the best-compensated CEO in the country in 2010 was John Hammergren at McKesson, the world’s largest health-care company, with a total compensation package of $145 million. Under Hammergren’s contract, he will also collect $469 million as severance. Quite a “reward for performance” system there, when your “penalty” for getting fired is almost half a billion dollars.
Here are the Top Ten:
“The 36.5 percent increase in realized compensation is particularly notable when it’s put in context of the modest growth of the economy in 2010 and general public company performance last year,” according to Paul Hodgson, chief communications officer and senior research associate at GMI.
“Particularly notable.” Yes, I suppose that’s one way to describe it.
And as GMI further notes, “In several notable cases, performance objectives that were not met in 2008 and 2009 were satisfied in 2010, though often only because the targets had been reduced. For that reason, during 2010, a modest economic recovery led to a rebound for many CEOs resulting in the annual cash bonuses.”
When you can’t meet performance targets, you merely lower the targets and ka-ching!! Gotta love it, right?
And the best is yet to come. According to The Guardian, GMI Ratings “is expecting a rash of massive stock option bonuses as many firms awarded their top executives big option deals when the stock markets hit their lows in 2007-2008.
“There’s still a lot of money just waiting in the market,” said Hodgson. He described the upcoming awards as a “bombshell” likely to dwarf this year’s figures.
– Jay Bookman