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How Verizon Might Avoid Ruckus Over CEO's Pay
By Alan Murray
The Wall Street Journal
Wednesday, April 25, 2007

Verizon Chief Executive Ivan Seidenberg has reason to worry.  Some of the same shareholder activists who targeted former Pfizer chief Henry McKinnell and former Home Depot chief Robert Nardelli for excessive pay last year now have the telecom boss at the top of their hit list.

Messrs. McKinnell and Nardelli lost their jobs largely as a result.  Will Mr. Seidenberg go as well?

In today's tumultuous corporate environment, that's not an easy question to answer.  Nor is this one:  Who runs the corporation?  A decade ago, most chief executives were firmly ensconced at the top of a corporate hierarchy, and only the grossest misdeeds were likely to dislodge them.  Today, they seem susceptible to the judgments of a host of outsiders.

Then there's this thorny question:  What's a CEO worth?  Executive pay has emerged as the Achilles' heel of the corporate elite.  The scandals and turmoil of the past half-decade have taught corporate chieftains that they need the goodwill of the public to survive and thrive.  But persuading Joe Six-Pack that a chief executive needs to make $20 million a year for ho-hum performance is no easy task.

Which brings us back to Mr. Seidenberg. His total compensation last year was $23,669,100.  Included was $173,378 for personal use of the corporate jet and $10,000 to pay a financial planner to help keep track of all that money.

For investors, that pay was for mixed performance.  Anyone who bought the stock when Mr. Seidenberg became sole CEO in April 2002 has lost money.  Anyone who bought it at the start of 2006 earned a 34% return last year -- well above the average for S&P 500 companies, but below others in the telecommunications industry.  By contrast, AT&T provided a 52% return to shareholders last year -- and Chief Executive Edward Whitacre took in $36 million in pay.

ABOUT BUSINESS
 
Alan Murray's Business, published Wednesdays, examines the intersection of business, public policy and economics.

Alan is an assistant managing editor at The Wall Street Journal.  A graduate of the University of North Carolina, he joined the Journal in 1983.  After serving for nearly a decade as the Journal's Washington bureau chief, he spent three years as Washington bureau chief for CNBC before returning to the Journal in New York in 2005.  Alan holds a master's degree in economics from the London School of Economics, and is the author of "The Wealth of Choices:  How the New Economy Puts Power in Your Hands and Money in Your Pocket" and "Revolt in the Board Room:  The New Rules of Power in Corporate America."
Write to him at business@wsj.com.

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