If, after having seen our “Mega Million Paydays” cover, you haven’t already turned to page 12 to read the story, I’d be pretty surprised.
Why? Well, to paraphrase Shakespeare: “Where breathes the man who is not interested in the outrageous compensation of his fellow man?”
Just as an aside, it’s funny how many words beginning with “out” (besides outrageous) can be used to characterize these compensation packages: There’s outsized, outstanding, outlandish.
In any case, when we came up with the idea for the story and Jim Connolly started doing the research for it, I really didn’t have any idea what we would find. Of course, I knew the packages would be 7-figure ones, but finding so many 8-figure paydays was something of a surprise.
Granted, in this age of hedge fund managers taking home hundreds of millions of dollars in one year, I probably should not have been surprised at what the top execs at life insurance companies were making. But, hey, this is the sleepy life insurance business we’re talking about, n’est-ce pas?
But if you’re waiting for me to get on my populist horse (and I know at least some of you are wondering why I’m not in the saddle already) you’ll have to look elsewhere this time around. The reason I’m not taking old Betsy for a ride is that I spoke to Mark Watson, managing director, corporate governance, at Moody’s Investors Services, and he put it all in perspective.
When I asked him about Art Ryan of Prudential’s $25.7 million package (the highest on our list), Mark’s response was that it was not “extraordinary,” considering where Pru stands in the ranks of American companies.
But what I really found interesting in talking to Mark was his comment about how the life insurance business–uniquely among financial services industries–has made a practice of importing talent from other sectors.
Ryan is a case in point, having come from banking. There are other examples among the execs on the list.
Needless to say, the industry also has its share of home-grown talent occupying the corner office. Rob Henrikson of Metropolitan Life, whom I profiled last year, is a lifetime company man.
But Watson’s point about importing talent was that if a company is going to do so, it’s going to have to compensate at a level commensurate with the industry the executive is coming from.
This situation also works nicely for those home-grown execs, because this is an instance where a rising tide lifts all boats.
And speaking of these executives, why am I not surprised at how homogeneous a group comprised of predominately middle-aged white men it is? Kind of reminds you of the Republican debates. (Oops, my foot’s in the stirrup, but I’m not going to mount.)
Here’s something else that put this compensation in perspective for me. As I write this, both Sotheby’s and Christie’s have had record-breaking contemporary art auctions on consecutive days. At Sotheby’s, a Mark Rothko painting sold for $72.8 million, while the following evening, an Andy Warhol went for $71.7 million.
Yes, Virginia, there actually are people who can afford to pay such prices for works created in 1950 and 1963, respectively. And not one of them was an insurance executive, as far as I know. (Think hedge fund manager or Russian oil.)
Many of the executives on our list sit atop companies that are American icons with whose perpetuation they are entrusted. They’re also responsible for protecting millions of lives.
Gentlemen, enjoy your earnings.