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Compensation in the Eye of the Beholder

28 Apr, 2005 By: Erik Gruenwedel

When corporate raider Carl Icahn recently denounced Blockbuster Inc. CEO John Antioco’s 2004 $51 million compensation package (including deferred stock options), it seemed easy to me, as a reporter who earns less than 9/1,000th of that amount, to pile on the outrage.

After all, part of Antioco’s payment included a $5 million cash bonus, despite overseeing a year in which Big Blue posted a $1.25 billion loss and saw its stock price drop almost 42 percent. Then again, compensation rates at the top of the corporate food chain last year appeared immune to the company’s net results (often poor) and outside scrutiny or common sense.

Consider Sumner Redstone, Viacom’s 81-year-old CEO whose notable act in home entertainment involved jettisoning Blockbuster from the company portfolio. He earned $56 million in real and deferred compensation — a 58 percent raise from 2003 despite the discrepancy that Viacom posted a net loss of $17.5 billion and its stock dropped 18 percent in value.

He wasn’t alone at the cash trough.

According to Forbes Magazine, CEOs at the nation’s top 500 companies received a 54 percent pay raise last year — 46 percent more than in 2003. Overall compensation topped $5.1 billion, or $5.5 million per CEO. The highest paid was Terry Semel, CEO of Yahoo!, who earned $230.6 million, mostly in exercised stock options.

A perusal of the top 500 found no mention of Antioco, or Icahn; Forbes still ranked Icahn the 47th richest person in the world, with a net worth approaching $7.6 billion.

Surprisingly, I found one of my groomsmen from a long-ago marriage on the list. John Bucksbaum, CEO of General Growth Properties and an amorphous sounding developer of shopping centers, ranked No. 492, reportedly earning $235,000 in annual salary and owning company stock exceeding $2 billion in market value. Who knew? To me, he’s just Bucky, a cycling buddy who lives in Chicago and wishes he was riding in the Tour de France. And to think I’m the one who doesn’t return his calls!

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