What They Make: The Highest-Paid CEOs In Digital Media

2 Comments

imageOver the next few months, digital-media companies will release proxy statements, offering the first glimpse of their CEOs’ total-compensation packages for 2008. Last year, of course, was one of the most brutal in history for companies in many industries, and one big question is whether digital-media CEOs will take a comparable hit to their paychecks. We’ll soon find out.

In the meantime, we went back to see how this played out last time around — that is, whether the 2007 compensation for the CEOs of pure-play publicly traded digital-media companies moved in line with those companies’ stock-market performances for the year. It may surprise you (or not) that the answer, in many cases, is that it didn’t. Mel Karmazin, the CEO of Sirius (NSDQ: SIRI), got a 23 percent jump in pay in 2007, pocketing more than $7 million. What happened to his company’s share price in 2007? It dropped 23 percent. ComScore’s Magid Abraham also did quite nicely for himself, almost tripling his compensation, even though his company’s stock fell by 16 percent.

After the jump, a chart (click to enlarge) showing what digital-media CEOs make, based on 2008 proxy statements, the most recent set available.

(While a couple of companies have released their 2009 proxy statements — eBay (NSDQ: EBAY) CEO John Donahoe got $20.8 million in total comp last year, while ValueClick’s Tom Vadnais made $1.2 million — both executives are in their first year in the job, so comparing 2007 comp with 2008 comp is less instructive.)

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Methodology: To come up with 2007 total compensation numbers, we looked the proxies and added up salaries, cash bonuses and stock bonuses for the heads of publicly traded digital media companies. We defined total compensation as salary, cash bonus, and stock or options received in the form of a bonus, according to the proxy statements. Stock and option awards are listed at fair value at the time they were granted to the executive. Some of these options may currently be worth more or less depending on the underlying stock’s share price.

2 Comments

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My opinion as an accountant, the presentation clearly indicates the comparison of all pertinent data in relation to their company’s stock performance. Same as your observation, I wonder why Mel Karmazin had a 23% increase during 2006 then eventually dropped in 2007 exactly the same percentage as 2006.

Kas Thomas

It would be nice if you had done a simple scatter-plot of the data. The table is cognitively challenging and very Web 1.0-looking. Also, where's the statistical analysis to tell me whether a correlation exists and if so, how much and with what expected error? Why am I supposed to intuit all this by looking at a bunch of text dumped in a chart?

Otherwise, well done.

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