Saturday, August 15, 2009

Highest-paid US CEO

Mr Schwarzman's pay package was decided by the CEO himself and not by a compensation committee. -- PHOTO: REUTERS

WASHINGTON - THE highest-paid United States chief executive officer (CEO) received US$702.4 million (S$1 billion) in compensation last year as the recession deepened, a report by a shareholder rights organisation showed.

Taking his private equity firm public paid off big for Blackstone Group's Mr Stephen Schwarzman, 62, who topped the ranking by the Corporate Library.

But the surest route to big bucks was running an oil or natural gas company. Their CEOs - cashing in on stocks that until last summer were still chasing oil's rally to a record high near US$150 a barrel - represented seven of the 10 highest-paid US chief executives last year, said the report.

Mr Schwarzman bumped Oracle Corp's Mr Larry Ellison down to No. 2 on the list. They were followed by seven oil firm CEOs and Mr Michael Jeffries, head of teen apparel retailer Abercrombie & Fitch.

Last year stood out for the amounts the top-paid executives received, as seven secured total compensation of more than US$100 million (S$144 million). Just three made that much a year before and two were retiring CEOs, said Corporate Library research associate Greg Ruel, who co-authored the report.

Mr Ellison's compensation, for instance, soared to almost US$557 million, from US$192 million.

The companies that fell off the top 10 included eBay, Target, Goldman Sachs, Capital One Financial Corp and United Technologies Corp. 'It's not a surprise that this year there aren't any financial or insurance companies' in the top 10, Mr Ruel said.

The study ranks CEOs on 'total realised compensation', which includes cash pay and bonus, perks, plus the value of stock options exercised and the vesting of restricted shares.

The bulk of Mr Schwarzman's pay - US$699.8 million of the total US$702.4 million - reflected the vesting of share grants he received when the company went public in 2007. This vesting will continue over the next four years.

But Blackstone disputed that this should count as compensation. 'This is absurd,' said spokesman Peter Rose. 'At the time of the IPO, Steve received stock in exchange for his partnership interest in Blackstone. This vests over a number of years. In no sense does the stock he owns as it vests become compensation.'


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