Many of these chieftains went without bonuses in 2001. Some even ditched their regular salaries.
These grand gestures were enough to make even a hard-boiled case like yours truly get all warm inside.
But that was before I began reading through the corporate documents filed during this most recent proxy period. This crowd isn't about to follow in the footsteps of Mother Teresa.
For starters, consider the case of Gateway CEO Ted Waitt, who qualified for a $250,000 salary last year but instead only took home $20,833.
"Give that man a cow!" was my first reaction.
But reading a bit further you learn that Waitt also received 3 million stock options. While they may be underwater just now, his options stand to be worth quite a bit more in a few years. In the meantime, don't worry about Waitt scraping through; after returning to the helm of the company he co-founded, Gateway's prodigal son cashed in options worth a tidy $1.6 million.
Let's not pick on Waitt. Even sans bonuses, a lot of his fellow tech execs are similarly making out quite well despite lean times for their companies.
Take Motorola CEO Christopher Galvin's salary. (I sure would!) Because of Motorola's weak financial performance Galvin had his bonus and salary frozen. He still made $1.3 million, but had to forgo a $1.25 million bonus. That's a big hit, until you realize Galvin cashed out $2.73 million in options.
Motorola's other top execs didn't cash out options or get bonuses, but the message from Galvin's move is clear--the top guys always get their dough.
The message here: The top guys always get their dough.
So it was for the top executives at AOL Time Warner. Sadly, they had to forgo their annual bonuses, and they still have a way to go before they can cash out their options. But nobody in the executive suite at AOL Time Warner is thinking about putting anything on layaway.
AOL Chairman Stephen Case received a salary of $1 million as did outgoing CEO Gerald Levin. Both men also received option grants of 4 million shares. Levin didn't get the $10 million bonus he received in 2000, but I think he'll still be able to while away his golden years in fine fettle.
Ditto for former Jane Fonda workout fan, Ted Turner, who received $1 million in salary on top of an options grant for 2 million shares of AOL stock. Question: Turner's listed as vice chairman, but can anybody tell me what he actually does at the company these days?
Given the recent rallying cry among the frozen-salary-no-bonus crowd, it's almost refreshing when a CEO gets a raise and a bonus without making any apologies.
Enter AT&T's chairman, C. Michael Armstrong, who saw his salary climb to $1.8 million from $1.7 million the year earlier. His bonus of $2.21 million soared from $650,000 in 2000. Armstrong also got an option grant of 1 million shares. The bonus "reflects performance above threshold but below target," AT&T said. Considering Armstrong's humiliating failure to revive this struggling behemoth, rate that one as the mother of all understatements.
Maybe it's a telecom thing. Sprint increased the salary and bonus of its chairman, William Esrey, in 2001.
According to Gateway's filings, top executives can make more leaving the company than by sticking around.
With all these salary figures coming down the pike, it would be easy for a rank-and-file guy to get a bit depressed. Luckily, I have a simple money-making scheme that apparently works--at least at Gateway.
Here's the formula. Take an executive position at the company and stick around for a while. Then leave for greener pastures, picking up the handsome payoff on the way out the door.
An exaggeration? Not at all. According to Gateway's filings, top executives can make more leaving the company than by sticking around. Former CEO Jeff Weitzen left the company and made more than Waitt. On his way out, he garnered a $5.64 million cash payment and accelerated vesting of almost 2.5 million stock options. Not too shabby for a guy who was essentially demoted before quitting.
Meanwhile, Sue Parks, the former senior vice president who left the company in December, walked away with $1.48 million in cash and accelerated vesting of 125,000 stock options. And because she agreed not to court certain Gateway employees for a year, she got an additional accelerated 375,000 options and an extension of her exercise rights until Dec. 31 of this year.
Gateway also agreed to pay Parks $936,646 to cover her "equity loss together with the carrying and maintenance costs, grossed up for taxes," related to a San Diego house she bought when she took the Gateway job in August 2000. I don't think you can get this kind of a deal from Coldwell Banker.