April 6, 2012

Forbes’ List of Highest Paid CEOs Is Unveiled

Despite low salaries, their stock options and other incentive packages have these guys (and gals) loving life

It’s that time of year; birds are singing, allergies are kicking, occupiers are occupying and Forbes has released its annual list of the most highly paid CEOs. It will gladden or infuriate, depending on your point of view, as Forbes immediately acknowledges.

“Our report on executive compensation will only fuel the outrage over corporate greed,” it writes. “In 2011 the chief executives of the 500 biggest companies in the U.S. got a collective pay raise of 16% last year, to $5.2 billion. This compares with a 3% pay raise for the average American worker. The total averages out to $10.5 million apiece.”

So much for the “moral suasion” granted to shareholders last year with the first-ever say-on-pay votes for U.S. public companies, the magazine adds. A no vote, already a rare thing, is hardly ever binding.

The top earner in the report is John Hammergren of the medical supply company McKesson, with $131 million in total pay.

Seventeen female CEOs made the list, the highest paid being Irene Rosenfeld of Kraft Foods with $25.4 million in total pay last year.  

Forbes also points to five executives who take $1 in annual salary. Four are Forbes Billionaires: Larry Ellison of Oracle, Larry Page of Google, Meg Whitman of Hewlett Packard and Richard Kinder of Kinder Morgan. The other executive is John Mackey of Whole Foods.

Here are the top five:

5. David Cote of Honeywell

One-year total compensation: $55.8 million. Cote's bonus ($23.3 million) was tied to 13% sales growth and 19% segment profit growth at Honeywell (HON) in 2011, according to Forbes. Honeywell's stock was up 2% in 20011 and up 15% year-to-date.

4. Richard Kinder of Kinder Morgan

One-year total compensation: $60.9 million. A Forbes Billionaire (net worth $8.2 billion), took Kinder Morgan (KMI) public again in February of 2011. The stock is up 25% since the first trade day. He takes $1 in annual salary with most of his 2011 pay coming from vested shares tied to the offering.

3. Michael Fascitelli of Vornado Realty

One-year total compensation: $64.4 million, prior-year figure. Fascitelli took over as CEO three years ago, replacing Forbes Billionaire Steven Roth. The real estate investment trust Vornado Realty (VNO) owns 100 million square feet of office space in New York and Washington.

2. Ralph Lauren of Ralph Lauren

One-year total compensation: $66.7 million. Lauren, a Forbes Billionaire (net worth $7.5 billion) is a Bronx native and opened his New York City flagship store in the fall of 2010. The magazine reports he started Polo with $50,000 in 1976. The company (RL) now sells clothing, shoes, jewelry, home goods and fragrances.

1. John Hammergren of McKesson

One-year total compensation: $131.2 million. The highest-paid CEO on this year's report has been CEO of McKesson (MCK), a California-based medical supply company, for 13 years, according to Forbes. The bulk of 2011 pay came from cashed-out stock options with his salary and bonus remaining flat from a year ago. McKesson stock rose 20% in the fiscal year ending March 31, 2011.

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