Recent financial data, filed by publicly listed IT companies, reveals that those situated in the executive suites at some of the leading vendors had a very good year financially.
At the top of the list is Oracle's bold and brash leader, Larry Ellison. He took home US$61 million (NZ$76 million) in total compensation in 2007, which was a 100% increase from his 2006 total compensation.
The compensation data on the CEOs comes from a recent article in The New York Times that offered accounting breakdowns and comparative analysis of chief executive pay at 200 companies with revenues of at least $6.5 billion. (The data was gathered by compensation researcher Equilar).
The theme of the article is that in this tough economic climate and new era of more accountability and transparency for CEO compensation, companies are still paying their CEOs more (using "discretionary bonuses") even as the relative performance of the CEOs' companies is tanking.
In other words, summed up the Times report, "true links between pay and performance remained scarce".
Generally speaking, however, that was not the case with the IT companies highlighted in the article. While Ellison's pay did rise 100% from the year previous, Oracle's stock price rose 36%, and its net income rose 26% (revenues were nearly US$18 billion).
Ellison's total value of equity holdings in Oracle is now a mind-boggling US$24 billion.
Other high-tech execs did well personally as their companies prospered. IBM chief Samuel Palmisano earned nearly US$21 million in total compensation last year (an increase of 11% from 2006), while IBM's stock price rose 13% in value, and Big Blue gained 11% in net income on revenues of US$99 billion. (Palmisano's total value of equity holdings in IBM is now worth US$74 million.)
Cisco Systems chairman and CEO John Chambers' total compensation rose 29% to US$13 million in 2007, as Cisco's net income increased 31% from the year previous. Cisco shareholders did well too: its stock price increased by 62%, which also brought Chambers' total value of equity holdings to $272 million. EMC's Joseph Tucci experienced similar success: His total compensation rose 87% (to US$4.7 million) as EMC's net income rose 36%. EMC shareholders saw a 40% increase in the stock's value. (Tucci's total value of equity holdings is almost US$80 million now.)
Other high-tech CEOs, however, saw a decrease in their overall total compensation even as their companies and stock prices fared well in 2007. For example, HP's chief executive, Mark Hurd, saw his total compensation drop 8% to $26 million, while HP's net income gained 17% from 2006 (on revenues of US$104 billion). In addition, HP's stock price rose 34%.
Executives experiencing a similar year-over-year pay cut in total compensation while their companies realised an increase in shareholder value included Texas Instruments' Richard Templeton (17% cut in overall pay) and Sun Microsystems' Jonathan Schwartz (64% cut in overall pay).
Near the very bottom of the list were the names of three industry titans and their "meagre" 2007 compensation. Number 194 on the list of 200 was Microsoft CEO Steve Ballmer, who took home a paltry US$1.3 million (which was actually an increase of 31% from the year before), even as Microsoft's net income increased 12% (on revenues of $51 billion) and its shareholders saw a 28% increase of its stock price.
At number 197 was Google Chairman and CEO Eric Schmidt, who earned just US$480,561 in total compensation last year. Net income at the search giant rose 37% on revenues of more than US$16 billion and Google's stock rose 50%t.
And last (but certainly not least) on the list was Apple CEO Steven Jobs, who took home a whopping $1 last year. Apple, of course, had a good year: Net income rose 76% (on revenues of US$24 billion), and shareholder value increased 99%.
Don't worry too much about the last three executives, however. Just because they didn't take home much last year, doesn't mean they aren't obscenely rich: Ballmer's total value of his Microsoft equity holdings is worth US$12 billion, Schmidt's share of Google is worth $6.6 billion, and Jobs' stake in Apple is valued at more than US$851 million.