Normally it is okay for CEO’s to make big money, but not when the company is having a bit of a rough time. Ed Whitacre, the tyrant CEO of SBC Communications (which is just digesting its $41 billion cake called AT&T Wireless) took in a whopping $19.5 million in compensation.
Now compare this with the stock: It was one of the five worst performing stocks amongst its peers on the Dow Jones Industrial Average, down 4 percent for 2003. DJIA was up 25% last year. Revenues have been down for 13 straight quarters, and so have the earnings. Crucially in the 13-odd quarters the company’s fortunes have gone south, Whitacre made about $50 million.
San Francisco Chronicle reports that: “Whitacre received a base salary of $2.1 million, a bonus of $5.7 million, $2.4 million from the company’s long-term incentive program, $7.2 million in restricted stock awards and $2.1 million in additional compensation.” That is a total of $19.5 million (not including stock options), versus mere $8.6 million he earned in 2002. He made $21 million in 2001. Wow! This qualifies him for the “Broadbandits” club. In comparison, BellSouth CEO Duane Ackerman earned $2.3 million in 2002 and Ivan Seidenberg, CEO of Verizon Communications took home $9.5 million in 2002. Their 2003 incomes are yet to be revealed.
Whitacre’s income must be grating to about 30,000 employees or 15 percent of the total work force who were laid off during the time he has been stuffing himself with cash. He blamed increased competition and a soft economy. That works out to about $1650 or so per employee shown the door.