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Analyzing Barry Diller's Crazy Pay Numbers

The Wall Street Journal was out with it's decade-long pay survey this week, and I was shocked to find that Barry Diller is #2.

Barry Diller's companies, IACI and Expedia (an IACI spinoff), are worth collectively $10B. Diller was paid 1.14B over a 10-year period, according to the Journal.

In an interview with the Journal, Diller pointed out that most of his gains came from stock excercised earlier in the decade from deals he did in 1990s to build his company. Fine.

But $1B? This amount of pay seems egregious, when measuring the value created by his company and comparing it with others. Let's compare it to others in the list.

Larry Ellison, who founded Oracle, made $1.8B. But Oracle is worth $120B in market cap, more than 10 times as much as IACI and EXPE combined. Just to put things in perspective, Oracle generates cash flow of $8B per year, so Ellison was actually only paid a fraction of one year's cash flow over a decade.  IACI is currently losing money. In fact, it hasn't had a net profitable year for shareholders in the last three!

Now, onto Apple. Through a massive stock option swap mistake, Jobs gave up a lot of stock in Apple early in the decade, and that's a big reason why he only shows a $743 million gain. But when you campare it to IACI and Diller's $1.14B package, it makes Barry Diller look ridiculous. Steve Jobs has created incredible amounts of value for shareholders. Apple's market cap is now in excess of $200B. It's up more than 1,000% from 2000. Yet, Steve Jobs made only $743 million, significantly less than Diller.

Barry Diller tried to explain why he was worth it to the Wall Street Journal. I'd like him to explain it to me.


Disclosure: no positions