Outrageous Salaries of Chief Executive Officers When Gordon Gekko, in the movie 'Wall Street' told the shareholders of Teldar Paper, "The point is, ladies and gentlemen, that greed...is good. Greed is right. Greed works. Greed clarifies...captures the essence of the evolutionary spirit...and greed will not only save Tedar Paper but that other malfunctioning corporation called the U.S.A.," many corporate executives must have been listening and took it to heart (Wall pg). During the last few years, corporate scandals have remained front-page news and have rocked the foundation of the corporate business. Although the glory days are gone for most stockholders, for many CEOs the good times still roll on (Strauss, Hansen Pp).

The high profile scandals or fraud and executive chicanery has tarnished corporate America. "The sputtering economy and sagging corporate profits pounded stock for a third-consecutive year...But when it came to pain and suffering...most CEOs barely felt the downdraft last year" (Strauss, Hansen Pp). Based on an exclusive database analysis by USA Today and the Investor Responsibility Research Center, a corporate-governance watchdog, CEOs running 100 of the biggest companies in the United States pulled in median 2002 compensation of $33.4 million, essentially unchanged from 2001 (Strauss, Hansen Pp). This analysis included "salaries, bonuses, incentive pay, stock awards, gains from exercising stock options and the potential value of stock-option grants" (Strauss, Hansen Pp). The tally revealed:

CEO salaries and bonuses surged 15% in year salaries for rank-and-file workers averaged 3.2% gains.

Instead of stock options, many companies gave CEOs large blocks of restricted shares, less risky equity stakes. Among 36% of CEOs receiving them, the median value was $2.9 million.

More than 90% received fresh stock-option grants, with a median potential value of $23.2 million.

Nearly one-third pulled in compensation valued at 50 million or more. Even at companies where pay fell, pay packages remained large. PepsiCo CEO

Steve Reinemund's pay package fell 62%, but was a still-impressive $76.5 million" (Strauss, Hansen Pp).

Critics believe that these huge pay packages reflect a boardroom culture largely...

John Nofsinger, co-author of 'Infectious Greed: Restoring Confidence in America's Companies,' says "The environment has changed dramatically, so now's the time you'd expect CEOs to lie low. Yet they still have the audacity to ask for more pay and large stock-option grants" (Strauss, Hansen Pp).
A few companies have not been able to justify big bonuses and option grants for CEOs, but many like Tenet Healthcare's Jeff Barbakow pulled in $190 million, $111 million from exercising stock options (Strauss, Hansen Pp). Dwight Schar of home builder NVR received a pay package of $219 million, $87.3 million from exercising options (Strauss, Hansen Pp).

While Sun Microsystems' stock fell 68%, Scott McNealy realized a $25 million gain exercising options (Strauss, Hansen Pp). Qualcomm's stock sank nearly 40%, yet Irwin Jacobs gained $61.4 million exercising options, and moreover, directors also boosted his bonus 33% to $800,000 and doled out options worth up to $36 million "in consideration of his leadership" (Strauss, Hansen Pp). Curbing CEO compensation is at the core of some 900 proxy fights surfacing at annual meeting, however, any proposals gaining investors' approval will have little impact in 2003, and any changes in CEO pay will not be evident until companies file 2004 annual reports (Strauss, Hansen Pp).

Pearl Meyer of Pearl Meyer & Partners, a compensation consulting firm, had been forecasting a sharp drop in executive pay, says, "Now, I'm not so sure. Boards are issuing large equity grants because so many CEOs are holding (worthless) options" and big option grants are likely to remain in vogue until regulators require companies to expense them, which would trim corporate profits (Strauss, Hansen Pp). Richard Trumka, treasurer of the AFL-CIO which sponsors 380 shareholder resolutions, says "Most CEOs will continue to be way overpaid. It's unfair and discouraging at companies freezing workers' salaries, cutting pensions and reducing benefits" (Strauss, Hansen Pp).

Many corporate boards ignored pay-for-performance guidelines and pre-established growth targets and rewarded CEOs in 2002 simply for managing during a tough economic…