CEOs Take Home Millions while Workers' Wages Stall, VCSTAR.COM

CEOs take home millions while workers' wages stall

By Stephanie Hoops
Posted August 27, 2011 at 3:21 p.m.

Read more: http://www.vcstar.com/news/2011/aug/27/ceos-take-home-millions-while-workers-wages/#ixzz1XTCuhp21
- vcstar.com

Earnings for the CEOs who head up the top 10 public companies in the Ventura County region rose 36.8 percent last year to a combined $51.33 million.

The executive pay boost comes at a time when many area workers haven't had raises in years. From 2009 to 2010, private sector wages in California rose just 2.3 percent, according to the Bureau of Labor Statistics.

The disparity doesn't veer from a trend that's been watched for decades: the American worker's earnings have stagnated while CEO pay has climbed dramatically. From 1980 to 2004, the average CEO's pay compared with the average worker's went from 50-to-1 to 349-to-1, according to the Congressional Research Service.

Today, however, amid a lingering economic crisis that's kept millions unemployed, public furor over CEO pay has intensified.

But some argue high pay packages are needed to attract and retain the best talent to successfully guide companies, which benefits shareholders.

The Star analyzed CEO compensation at public companies with local headquarters by examining the most recent proxy statements filed by the top 10, based on annual revenue.

Total CEO compensation includes salary, bonuses, awarded stock and option values, increase in retirement benefits and other pay incentives.

The results show the median pay for the 10 CEOs is nearly $2.7 million, more than 37 times the $71,723 median household income in the county, according to the California Department of Finance.

Most of the chief executives' pay increased along with shareholders' returns, with the exception of the CEO of Vitesse Semiconductor Corp., a Camarillo company that specializes in making products for Ethernet networking. Vitesse CEO Christopher R. Gardner's compensation jumped nearly 85 percent as shareholders' returns fell nearly 50 percent, with net income in the red.

"Gadzooks!" an investor exclaimed in a posting on the vtssinvestor.com forum, where shareholders post news and updates about Vitesse.

"What is wrong with this picture?" another shareholder asked of Gardner's $1.4 million pay deal.

Gardner has been CEO since 2006, when his predecessor, Louis Tomasetta, was fired amid a scandal involving the backdating of executive stock options to artificially inflate the value of the shares.

Vitesse did not respond to requests for comment.

TOP OF THE HEAP

Amgen CEO Kevin Sharer had the most lavish CEO compensation package. Sharer's pay totaled $21.1 million, more than twice the size of the next in line, Power-One CEO Richard J. Thompson's $8.2 million.

Sharer's pay includes perks such as a company plane, personal use of a car and driver, personal financial planning services, and $17,939 for guests who travel with him on business.

In 2010, he earned nearly 38 percent more than in 2009. His compensation package was opposed by some shareholders, who unsuccessfully tried to get it rejected.

"Outrageous," was what one person posted in April comments after The Star reported Sharer's most recent compensation increase.

"As an Amgen employee, all I can say is that I'm embarrassed," wrote another.

The median salary at Amgen is $84,000, according to Katie Bardaro, a lead research analyst at PayScale.com, a website that tallies compensation data in the labor market.

Amgen spokeswoman Mary Klem said in a written statement: "Our executive compensation programs are oriented toward rewarding long-term performance in support of stockholders' interests and are designed to attract, motivate and retain the highest level of executive talent by paying them competitively, consistent with their roles and responsibilities, our success and their contributions to this success."

Of the CEOs on the top 10 list, three took pay cuts: Lecil Cole at Calavo Growers in Santa Paula; David DeLorenzo at Dole Food Co. in Westlake Village; and Steven Nichols at K-Swiss in Westlake Village.

Cole's total compensation dropped 20 percent to $1,045,848 in 2010, slipping with a decline in his cash bonus, which was $492,792 compared with $778,841 in 2009.

At K-Swiss, Nichols' pay fell 10 percent to $1,125,742, mirroring the company's 9.9 percent revenue loss for the year.

Management analysis in its public filings attributes the losses to the global economic crisis that has impacted the retail environment, weakening demand for its athletic shoes.

DeLorenzo took in nearly $5.6 million, which was 34.4 percent less than the $8.5 million he got in 2009. Dole lost $34.12 million last year, compared with a profit of $84.09 million in 2009 - a $118.21 million reversal.

Dole, Calavo and K-Swiss did not respond to requests for comment.

Read more: http://www.vcstar.com/news/2011/aug/27/ceos-take-home-millions-while-workers-wages/#ixzz1XTCEumWm
- vcstar.com