NYTimes Tries to Make Hay Out of High CEO Pay, Admits Its Example is 'Extreme' (and Shareholder-Approved)
The front of the New York Times Sunday Business section featured Natasha Singer article under the headline "A Rich Game of Thrones – C.E.O. Pay Gains May Have Slowed, But the Numbers Are Still Numbing," which hit the reliably liberal crowdpleaser, the pay of chief executives.
The issue has long been an awkward topic at the New York Times Co.Publisher Arthur Sulzberger earned bonus pay in the form of stock and stock options of $4.9 million dollars in 2005, and chief executive Janet Robinson departed last year in a golden parachute worth a staggering $15 million. Of course, the Times never mentions those particular instances of greedy executives, sticking with big bad corporations not named New York Times.
Even Singer's case for greedy chief executives boiled down to the outsized reward (in stock) of a single CEO, Timothy Cook of Apple, approved by shareholders by a wide margin. But before providing the pesky context, Singer tried to numb us with Cook's big number:
Is any C.E.O. worth $1 million a day?
That’s roughly $42,000 an hour. Or $700 a minute. Or $12 a second.
Think of it this way: In the time it took to read those words, you could’ve pocketed $100. Finish this article and -- well, you do the math.
At Apple, the answer to that question is an emphatic yes, and then some. Not since Steve Jobs has a chief executive at Apple, or any other public American corporation, for that matter, been as richly rewarded in stock as Timothy D. Cook, who succeeded Mr. Jobs as chief executive last August, a few months before Mr. Jobs died.
Mr. Cook was paid a cash salary of roughly $900,000 in 2011. On its own, that would have been a ho-hum paycheck for a top American C.E.O. in recent years.
But then came a wild extra, a one-time award, in the form of Apple stock. It was initially worth a staggering $376.2 million. As of the end of last week, it was valued at roughly $634 million, reflecting Apple’s soaring share price.
Many credit Mr. Cook, along with Mr. Jobs, for Apple’s recent success. And the company is quick to note that Mr. Cook’s pay package extends over 10 years. One-half of his stock is scheduled to vest in 2016, and the other in 2021, provided that Mr. Cook still works for Apple. And, at a time when some investors seethe over far smaller paychecks -- a mere eight figures is relatively commonplace for top chief executives these days -- Apple’s shareholders are hardly up in arms over the magnitude of Mr. Cook’s reward. To the contrary, a vast majority voted in favor of it.
Singer played the class card: "Data on C.E.O. compensation in 2011, albeit preliminary, confirm what many of us already know: the top brass generally do much, much better than the rest of us, whether times are good or bad." Only later did she admit her big example was unrepresentative:
Mr. Cook is an extreme example of this phenomenon. He is, experts agree, an outlier -- the only chief executive on the Equilar list to pull down a nine-figure paycheck. His stock award was so valuable, even at its initial price, that his total compensation eclipsed that of the next nine C.E.O.’s combined. Those nine included Lawrence J. Ellison of Oracle, at $77.6 million, a perennial on the best-paid list, and Philippe P. Dauman, of Viacom, at $43.1 million.
Analysts say the uptick in C.E.O. pay is a sign that corporations are returning to business as usual after the last recession. When the economy soured, executive pay fell sharply at many companies, though not as much as many ordinary Americans might have hoped. With the recovery in 2010, pay then skyrocketed. Now it’s stabilizing, suggesting, perhaps, that corporate boards see more predictable economic times ahead.
Corporate America hasn’t entirely embraced reform. Some companies and industry groups have asked the Securities and Exchange Commission to jettison -- or at least delay putting in place -- a provision in the Dodd-Frank law that would require companies to disclose the ratio of C.E.O. pay to median employee pay, the kind of statistic that could grab headlines in this era of the 1 percent.
Strangely, the brunt of the article is about shareholders pushing back against high CEO pay, the opposite of the picture of runaway pay Singer is trying to paint. And Singer found it surprising that a list of the top-earning CEO's read "like an A-list of corporate titans." (As opposed to an A-list of street musicians?) She also worked in a crack about New York Times enemy No. 1, Rupert Murdoch.
The rest of the top earners list reads like an A-list of corporate titans, from Robert A. Iger of Walt Disney, ranked seventh, with pay of $31.4 million, to William C. Weldon of Johnson & Johnson, ranked 13th, with $23.4 million. (Mr. Weldon plans to step down as chief later this month; he will stay on as chairman.)
Rupert Murdoch of the News Corporation took 10th place, with compensation of $29.4 million -- a 75 percent increase from 2010. In a year when the News Corporation and Mr. Murdoch’s son James were embroiled in a scandal over phone hacking, the elder Mr. Murdoch earned a cash bonus of $12.5 million. That is because the company did well financially, analysts said, even if its reputation plummeted.