News & Analysis
Executive pay: 10 notable chip company CEOs
Dylan McGrath
11/5/2009 7:24 PM EST
CEO pay has remained a hot topic in recent years, with critcs arguing that it has skyrocketed as more engineers lose their jobs. A study by the advocacy groups United for a Fair Economy and the Institute for Policy Studies found that the average S&P 500 CEO was paid in 2008 $10.5 million, 344 times the pay of typical American workers.
With the results of the 2009 EE Times salary survey set to be published on Nov. 30, we examined how much those at the top of the organizational chart are pulling in. What follows is an analysis of the compensation packages of 10 notable semiconductor company CEOs, based on public documents from the most recent years available.
In most cases, information about executive pay covers the calendar year of 2008. In some cases, with executives who lead companies with fiscal years that don't correspond to the calendar year, we've included information from the most recently concluded fiscal year.
(It should be noted that those executives in companies whose fiscal years ended during calendar 2009 often had reduced pay packages due to company cost-cutting measures).
In all cases, the base salary received by CEOs was a drop in the bucket. CEOs cash-in on bonuses, stock options and other equity grants awarded by their boards of directors.
Here's what we found:
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HankWalker
11/10/2009 3:54 PM EST
Excellent article! This is a trend much broader than the electronics industry. In 1965 average CEO pay was 24 times that of the median worker, 35 times in 1978, 71 in 1989, 298 in 2000, and 275 in 2007. Median CEO pay in 2007 is 194 times that of a worker.
The question is then whether CEOs have somehow become more valuable to their companies than a worker. This argument might work for Steve Jobs, but it is hard to name more than a few other CEOs in this category. And one might ask why US CEOs are supposedly 2-5x more valuable than CEOs in other countries, when US company performance is not that much different. This leads to a discussion of the diligence of corporate boards, boards loaded with CEO buddies, stockholder activism, etc.
One could further broaden this discussion to the fact that the gap between the 0.1% or top 0.01% and top 10% is where the real widening is occurring. This is more of a public policy discussion, than an electronics industry discussion.
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Dylan_EET
11/12/2009 1:42 PM EST
Thanks for your comment, Professor Walker. I agree this is an ominous trend for typical workers (like me). But who is to blame and what can be done? Boards are presumably looking out for their companies' best interests by awarding pay packages designed to retain and motivate experienced and/or talented CEOs (the going rate for whom has skyrocketed). CEOs are trying to maximize their earnings, just as we all do to one degree or another. I can't imagine that company boards of directors will consciously make an effort to try to narrow this gap unless they believe it will improve the bottom-line performance of their firms. What's the remedy?
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