The booming stock market creates super-rich executives
The Masters of the Universe are enjoying bull-market-blessed compensation packages, though Houston isn’t exactly sharing in the bounty.
On a national average CEO’s earned around $9 million each in 2011, up 6.9%, but there is an elite group of CEO’s who made more than $50 million last year. Compensation consultant John James from Pace University calls that “obscene.”
Their bulging bank accounts benefit from things like stock options and restricted shares written into their employment contracts. In a booming market, their salaries go boom. The CEO of Starbucks exercised stock options this past year for more than $103.3 million dollars. Vested shares added another $10.2 million to his pockets. Nice work if you can find it. Tim Cook took over Apple in 2011 with a generous package that included restricted shares. He cashed in more than $139 million last year.
But we do things different here in Texas, so don’t expect Houston CEO’s to bring home that much bacon. Brent Longnecker, one of Houston’s top executive compensation consultants, says “pay for performance” plays a big role in Texas corporations’ determination of what to pay their top executives, and even though business in this energy-industry rich region has been doing some booming of its own, boards of directors tend to be more conservative than in other regions of the country. When all of the compensation figures for 2012 are released in the coming weeks, don’t expect to see Texas tycoons on the list of the $50-million-plus club. The highest paid executive in Houston is Clarence Cazalot, President and CEO of Marathon Oil, whose total compensation for 2011 was $31.5 million.