Executive Pay Comparisons for 50 Largest S&P 500 Companies

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by: John Henderson
Ever wonder what the chief executive officer of a large publicly traded company earns in total pay when including perks and stock options? Or, perhaps more importantly, if the executive truly deserves of that amount of compensation? To answer these questions, I looked closely at statistics from the 50 largest (by market cap) members of the S & P 500. (Note that I excluded foreign entity UBS and replaced it with the Altria Group (NYSE:MO). Also Berkshire Hathaway (NYSE:BRK.A) was excluded as it was not part of the S and P 500 when I began this study.)

I then compared the executive’s total pay to the executive performance both individually and in comparison to the executive’s peers. Executive pay was investigated with respect to the number of employees led, revenues and earnings generated, and share performance (excluding dividends). One could look at these tables I created and perhaps correctly conclude that the lowest ranked CEOs in the executive pay per employee column, and in the percentage of revenues and of earnings columns as the best bargains. However share performance should be looked at too. Also, there are many other ways to examine the performance of executives besides what I have included here, but I thought this was a good start.

To gather the data, I used a wide variety of sources including Yahoo Finance, Google Finance, corporate 10ks and 10Qs, Reuters, Forbes and the AFLCIO web site. For executive pay, the AFLCIO web site offered information on executive pay in 2 ways. The first included vested options and the second included option grants. The AFLCIO web site favors the second way as it feels that is a more accurate portrayal of executive total pay. Corporations though use vested options when totaling executive pay as this is GAAP reporting. Both methods have merits, so I decided to average them out and then called this statistic Average CEO Pay.

Also, a note about the fiscal year end dates used. Much of this information comes from year-end 10-K filings. However, not all companies use the same fiscal year, nor are many 10-Ks for 2009 yet filed, so I then focused on the latest fiscal year that was available. Mostly, this was fiscal year ending December 31st 2008. But some of the data also includes companies that had their fiscal year’s end on different dates in 2009 meaning that some share performance statistics may not compare fairly. The data from 2008 turned out to be important because executive pay scales were determined in an environment then that was less scrutinized than the current one. 2008 was a year of turmoil in the financial markets and the recession was gaining steam.

One last observation about executive pay: when the executive was paid on the low side when compared to peers, the executive was often a founder or joined the corporation in its early stages. This was especially true with Steve Jobs of Apple (NASDAQ:AAPL) and Eric Schmidt of Google (NASDAQ:GOOG), who tend to already be very wealthy from their existing share holdings, whereas other executives are not in that position. However Larry Ellison turns out to be the exception here as he is near the top of the executive compensation rankings and was at Oracle (NYSE:ORCL) when it first started up.

Here are some other interesting quick stats: The average CEO total pay was $19.6 million; the average number of employees was 170,000; the CEO was paid an average of $459 per employee; average annual revenues were $78 billion and earnings were $5.8 billion; CEO pay was an average of 0.06% of revenues, and 0.42% as a percentage of earnings. The lowest paid CEO was Steve Jobs of Apple at $1 per year. The highest was Larry Ellison of Oracle. The lowest paid CEO per employee (aside from Jobs) was H Lee Scott of Wal Mart (NYSE:WMT), the highest Ray Irani of Occidental Petroleum (NYSE:OXY). The lowest CEO pay as a percentage of company revenue was Microsoft’s (NASDAQ:MSFT) Ballmer, the highest (aside from Ellison) John Martin of Gilead (NASDAQ:GILD). The largest corporate earners were Exxon Mobile (NYSE:XOM) and Chevron Texaco (NYSE:CVX).

Two companies lost money for their respective periods and these were Citi (NYSE:C) and Conoco Philips (NYSE:COP). The lowest paid CEO as a percentage of corporate earnings (aside from Jobs and Ballmer 1st and 2nd respectively) was Eric Schmidt of Google. The highest paid CEO as a percentage of corporate earnings was American Express’s (NYSE:AXP) Kenneth Chenault. The best stock performance was a 65% return by Monsanto’s (NYSE:MON) stock but the fiscal year ended on August 31st. If looking at the Dec. 31st fiscal years, Gilead’s John Martin, and McDonalds’ (NYSE:MCD) James Skinner led their companies to positive stock returns. The worst returns were from Citi led by Vikram Pandit, Goldman (NYSE:GS) led by Blankfein and American Express led by Chenault.

Here are the tabulated stats:

Symbol CEO Name Avg CEO Pay ($) # of Employees CEO Pay per Empl. Date
XOM Rex Tillerson 27,312,841 80,000 341 12/31/2008
MSFT Steven Ballmer 1,276,627 93,000 14 6/30/2008
WMT H Lee Scott 19,263,774 2,100,000 9 1/31/2009
AAPL Steve Jobs 1 34,300 0 12/31/2008
PG Alan Lafley 23,539,539 135,000 174 6/30/2009
JNJ William Weldon 29,260,010 115,000 254 12/28/2008
GOOG Eric Schmidt 508,764 19,835 26 12/31/2008
GE Jeffrey Immelt 11,688,769 300,000 39 12/31/2008
IBM Samuel Palmisano 26,753,970 398,455 67 12/31/2008
JPM Jamie Dimon 27,708,057 222,316 125 12/31/2008
T Randall Stephenson 13,675,043 282,720 48 12/31/2008
PFE Jeffrey Kindler 14,659,011 120,700 121 12/31/2008
CVX David O'Reilly 17,054,389 67,000 255 12/31/2008
WFC John Stumpf 11,275,684 267,300 42 12/31/2008
CSCO John Chambers 12,255,366 66,550 184 6/25/2009
BAC Kenneth Lewis 9,908,400 283,717 35 12/31/2008
KO E. Neville Isdell 27,490,189 92,400 298 12/31/2008
ORCL Lawrence Ellison 70,656,305 86,000 822 5/31/2009
HPQ Mark Hurd 38,272,773 304,000 126 10/31/2008
INTC Paul Otellini 12,565,200 79,800 157 12/27/2008
PEP Indra Nooyi 14,854,384 198,000 75 12/27/2008
PM Louis Camilleri 37,629,255 75,600 498 12/31/2008
C Vikram Pandit 24,544,350 265,000 93 12/31/2008
ABT Miles White 28,294,441 72,000 393 12/31/2008
VZ Ivan Seidenberg 19,453,383 222,927 87 12/31/2008
GS Lloyd Blankfein 22,030,286 36,200 609 11/28/2008
MRK Richard T Clark 15,521,634 55,200 281 12/31/2008
SLB Andrew Gould 14,508,191 77,000 188 12/31/2008
COP James Mulva 26,897,254 30,000 897 12/31/2008
MCD James Skinner 13,596,919 400,000 34 12/31/2008
V Joseph Saunders 14,042,490 5,700 2,464 12/31/2008
QCOM Paul Jacobs 16,403,412 16,100 1,019 9/28/2008
OXY Ray Irani 45,434,736 10,400 4,369 12/31/2008
UTX Louis Chenevert 20,792,801 233,100 89 12/31/2008
DIS Robert Iger 40,923,347 144,000 284 9/27/2008
MMM George Buckley 12,586,938 75,000 168 12/31/2008
AMGN Kevin Sharer 14,146,657 16,700 847 12/31/2008
UPS D Scott Davis 5,741,972 426,000 13 12/31/2008
AMZN Jeff Bezos 1,281,840 24,300 53 12/31/2008
HD Francis Blake 8,914,350 209,300 43 2/3/2008
BMY James Cornelius 24,094,002 35,000 688 12/31/2008
MDT William A Hawkins III 8,282,600 41,158 201 4/24/2009
CVS Thomas Ryan 23,109,454 215,000 107 12/31/2008
AXP Kenneth Chenault 35,360,245 58,300 607 12/31/2008
CMCSA Brian Roberts 24,984,455 100,000 250 12/31/2008
BA W James McNerney Jr. 17,802,930 157,100 113 12/31/2008
KFT Irene B. Rosenfeld 17,848,339 98,000 182 12/31/2008
GILD John C Martin 11,775,975 3,441 3,422 12/31/2008
MON Hugh Grant 14,365,755 22,900 627 8/31/2008
MO Michael E Szymanczyk 11,600,000 10,400 1,115 12/31/2008
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Symbol Revenues CEO Pay as % Revs Corp. Earn CEO Pay as % Earn % Share Returns
XOM 477 0.0057 45.00 0.0607 -13.10
MSFT 58 0.0022 14.60 0.0087 -5.30
WMT 406 0.0047 13.40 0.1438 -5.51
AAPL 37 0.0000 8.00 0.0000 -56.91
PG 79 0.0298 13.40 0.1757 -13.57
JNJ 64 0.0457 12.90 0.2268 -16.54
GOOG 22 0.0023 4.20 0.0121 -55.51
GE 183 0.0064 17.30 0.0676 -53.93
IBM 104 0.0257 12.30 0.2175 -20.78
JPM 112 0.0247 4.90 0.5655 -25.16
T 124 0.0110 12.90 0.1060 -28.06
PFE 148 0.0099 8.10 0.1810 -17.00
CVX 273 0.0062 23.90 0.0714 -18.33
WFC 52 0.0217 2.40 0.4698 1.70
CSCO 36 0.0340 6.10 0.2009 -22.96
BAC 124 0.0080 2.60 0.3811 -63.10
KO 32 0.0859 5.80 0.4740 -24.10
ORCL 23 0.3072 5.60 1.2617 -13.97
HPQ 118 0.0324 8.30 0.4611 -25.44
INTC 38 0.0331 5.30 0.2371 -45.73
PEP 43 0.0345 5.10 0.2913 -27.01
PM 64 0.0588 6.90 0.5454 -9.06
C 130 0.0189 -28.00 -0.0877 -75.96
ABT 30 0.0943 4.90 0.5774 -2.49
VZ 97 0.0201 6.40 0.3040 -18.07
GS 54 0.0408 2.00 1.1015 -64.98
MRK 24 0.0647 7.80 0.1990 -45.33
SLB 28 0.0518 5.40 0.2687 -56.49
COP 246 0.0109 -17.00 -0.1582 -39.80
MCD 24 0.0567 4.30 0.3162 8.59
V 7 0.2006 2.40 0.5851 -6.86
QCOM 11 0.1491 3.20 0.5126 9.91
OXY 24 0.1893 6.90 0.6585 -20.67
UTX 59 0.0352 4.70 0.4424 -28.03
DIS 36 0.1137 3.30 1.2401 -3.22
MMM 25 0.0503 3.50 0.3596 -29.84
AMGN 15 0.0943 4.20 0.3368 24.35
UPS 51 0.0113 3.00 0.1914 -19.75
AMZN 19 0.0067 0.65 0.1987 -44.65
HD 77 0.0116 4.40 0.2026 -23.46
BMY 21 0.1147 5.40 0.4462 -6.03
MDT 14 0.0592 2.20 0.3765 -38.98
CVS 87 0.0266 3.20 0.7222 -27.15
AXP 32 0.1105 2.70 1.3096 -63.73
CMCSA 34 0.0735 2.50 0.9994 -6.63
BA 68 0.0262 1.30 1.3695 -50.07
KFT 42 0.0425 2.90 0.6155 -14.62
GILD 5 0.2355 2.00 0.5888 11.15
MON 11 0.1306 2.00 0.7183 65.00
MO 19 0.0611 4.90 0.2367 -31.32
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Authored by Tom Henderson, Strategist JBH Capital.

Disclosure: Long-term tiny shareholder in Exxon Mobil.