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AOL execs report salaries to SEC

America Online's Steve Case got a 36 percent raise this year. But he's still not making as much as either Bob Pittman or Bruce R. Bond.

America Online (AOL) chief executive officer, president, and chairman of the board Steve Case got a 36 percent raise this year.

But, at least when it comes to salary, he didn't make as much as Bob Pittman, CEO of the online services portion of AOL, or as much as Bruce R. Bond, CEO of the company's recently sold ANS Communications division, according to a document filed with the Securities and Exchange Commission today.

Case, who did not receive a raise in his base pay in 1995 or 1996, got a salary hike this year and received $271,250. That topped Ted Leonsis, CEO of AOL studios, who made $236,250 this year. But Leonsis received a bonus of $46,875, while Case received no such bonus.

Bob Pittman, hired at the very end of 1996, started out this year with a salary of $335,064, plus a bonus of $125,000 and other compensation of $111,092 that covered items such as a moving expenses tab of $80,000.

Bond made $384,616 this year, plus a bonus of $128,600.

While Case made less than the division heads, he also owns more AOL stock than any other executive. According to the document, he owns 2.4 million shares, or 2.3 percent of the company.

It's not unusual for CEOs of high-tech companies, especially CEOs who also were founders, like Case, to make less money than the people they hire, said Jon Holman, president of the Holman Group, a high-tech executive search firm in San Francisco.

"It is actually quite common in Silicon Valley for a founder of a company who is acting as the CEO to go out and recruit someone else for a job further in the organization and pay him even more," Holman said.

That's because CEOs have something that's often a lot more lucrative than the cash paid out in salaries: they get stock. Case's 2.4 million shares are worth $183.5 million today. That doesn't include unexercised stock options.

This year Case walked away with 100,000 additional options, with an exercise price of $26.25 a share, while Pittman fared even better with 500,000 options at a strike price of $24.63 a share. Leonsis received 50,000 options with an exercise price of $26.25 a share, and Bond received 20,000 options with at a similar price.

AOL closed at 77-11/16 a share yesterday.

Options, which allow the recipent to purchase the stock at a fixed price that is usually lower than the market price, serve as a way to retain executives and employees who can exercise them after a designated date has passed. The holder of these exercised options can later cash out the stock at market price.

As for how other investors are doing, according to AOL's own statistics supplied in the document, anyone who had invested $100 in AOL stock in 1992 would be a lot richer today than if they had invested the same amount of money in the NASDAQ Market Index or the C&DP INDEX.

According to an AOL chart, a $100 investment in AOL stock in 1992 would have grown to $3,296.30 by June 30 this year. On the Nasdaq it would have grown to $264.60, and on the C&DP, it would have increased to $349.40. AOL's stock has risen 27 percent from June 1996 to June of this year.

The SEC document also discusses AOL's recent move to purchase CompuServe (CSRV) and to sell off its business division. But the sales are on hold while the Federal Trade Commission determines whether the purchase would violate antitrust laws.

AOL will be holding its next stockholders' meeting at 10 a.m. on Halloween Day, October 31, in Chantilly, Virginia.