11 Most Overpaid CEOs by Industry

by: Kapitall

Continuing the theme from one of our previous articles, we took another look at S&P 500 stocks with the most overpaid CEOs.

The list is compiled by comparing 1-year return and CEO compensation across industries. Yes, this is a crude way to analyze CEO compensation, but our intention is to create a starting point for you to do a more thorough evaluation for yourself. All the CEO compensation data is sourced from Capital IQ.

To access the interactive graphics, click on the images below.

1. Apparel Store Industry's Most Overpaid CEO: Michael Jeffries, Abercrombie & Fitch (NYSE:ANF)

Abercrombie & Fitch's Michael Jeffries made $36.3M in total compensation over the last year, much more than the industry's average, which is about $12M. Even though competitors Limited Brands Inc. (LTD) and Urban Outfitters Inc. (NASDAQ:URBN) both outperformed Abercrombie & Fitch, Jeffries still received more than both competitors' compensations combined.

ANF earnings have declined by more than 17% over the last 5 years, with sales growing by only 7.7% during the same time period. The stock has gained more than 33% over the last year.

2. Gas Utility Industry's Most Overpaid CEO: Donald Felsinger, Sempra Energy (NYSE:SRE)

According to Capital IQ, Sempra Energy's Donald Felsinger received $20.9M in total compensation over the last year. Sempra Energy paid its CEO more than the sum of the next two industry competitors Integrys Energy Group (NYSE:TEG) and Oneok Inc. (NYSE:OKE), both of which outperformed Sempra Energy.

It is also worth pointing out that the smart money isn't too enthusiastic about Sempra Energy. Insiders, who currently own 0.26% of the company's shares, reduced holdings by 1.53% over the last 3 months. Institutions, who currently own 64.92%, reduced holdings by 1.52% over the same period.

3. Personal Products Industry's Most Overpaid CEO: Ian Cook of Colgate-Palmolive Co. (NYSE:CL)

Colgate-Palmolive's Ian Cook made $17.2M last year, which is $6M more than the industry's next closest CEO, Kimberly-Clark's (NYSE:KMB) Thomas Falk. Is this pay package justified when considering that CL's stock traded in line with its competitors' over the last year?

Colgate-Palmolive insiders, who currently own 0.21% of the company, might not believe so, as they have decreased their holdings by 10.44% over the past 3 months.

4. Oil & Gas Drilling Industry's Most Overpaid CEO: Eugene Isenberg, Nabors Industries Ltd. (NYSE:NBR)

Nabors Industries' Eugene Isenberg made $23.3M over the last year, significantly more than Rowan Companies' Matt Ralls ($4.91M) and Helmerich & Payne's Hans Helmerich ($1.8M). Both companies outperformed NBR over the past year.

Is the smart money giving up on Nabors Industries? Insiders, who currently own 4.34% of the company's shares, reduced holdings by 0.04% over the last 3 months, while institutional investors, who own 87.10%, reduced holdings by 10.79% over the same period.

5. & 6. Regional Banking Industry's Most Overpaid CEOs: Frederick Waddell, Northern Trust (NASDAQ:NTRS), and Richard Davis, US Bancorp (NYSE:USB)

Both NTRS and USB lagged the rest of the industry in one year returns, but their CEOs still managed to receive the most compensation within the industry. NTRS' Frederick Waddell received $11.9M over the last year, while USB's Richard Davis received $8.2M.

7. Aerospace Industry's Most Overpaid CEO: Bob Stevens, Lockheed Martin (NYSE:LMT)

Lockheed Martin's Bob Stevens received $22.99M in compensation over the last year, even though the company's stock underperformed the rest of the aerospace industry.

Lockheed Martin's trailing P/E stands at 9.90, forward P/E at 9.71, and PEG stands at 1.43. The stock's dividend yield is currently at 3.37%.

8. Telecom Industry's Most Overpaid CEO: Randall Stephenson, AT&T (NYSE:T)

AT&T's CEO Randall Stephenson was compensated $29.2M last year, which is almost $12M more than the next highest paid, Verizon's Ivan Seidenberg ($17.5M). And what did Mr. Stephenson show for his nearly $30M compensation? A one year return of less than 1%.

9. Semiconductor Industry's Most Overpaid CEP: Paul Otellini, Intel Corp. (NASDAQ:INTC)

According to Capital IQ, Intel Corporation's Paul Otellini received $14.6M in compensation over the last year, which is considerably more than Texas Instruments' (NYSE:TXN) Richard Templeton ($9.9M) and AMD's Derrick Meyer ($4.6M).

Intel's trailing P/E stands at 13.00, forward P/E at 10.10, and PEG stands at 1.14. Dividend yield is currently at 2.90%.

10. Software Industry's Most Overpaid CEO: Lawrence Ellison, Oracle Corp. (NYSE:ORCL)

Oracle's Lawrence Ellison made $56.8M in total compensation over the last year, well over the industrial average, which is about $13M. Even though competitors BMC Software Inc. (NASDAQ:BMC), Salesforce.com (NYSE:CRM) and Red Hat Inc. (NYSE:RHT) outperformed Oracle over the past year, Oracle paid Ellison more than all three competitors' CEO' compensations combined.

11. Business Software Industry's Most Overpaid CEO: Gary Butler, Automatic Data Processing Inc. (NASDAQ:ADP)

ADP's Gary Butler made $8.1M over the last year, which is more than Cognizant Technology Solutions' (NASDAQ:CTSH) Francisco D'Souza ($5.6M) and Citrix Systems' (NASDAQ:CTXS) ($5.1M). ADP may have posted a one year return of 12.9%, but both Cognizant (+86.9%) and Citrix (+34.6%) outperformed the industry's highest paid CEO.

Disclosure: No positions