Capital One and Bank of America are TOAST
By Daniel at 10 December, 2008, 1:10 am
Overall compensation for the nation’s top executives rose more than expected last year, but the rate of increase was the lowest in six years, according to a study released Tuesday.
The Corporate Library, an independent corporate governance group, said the median pay raise for the 1,864 executives who received one in 2007 was 7.5%. Total actual compensation for chief executives at 2,701 companies - including those with pay cuts or no change - was a median $2.05 million.
CEOs at companies with a larger market capitalization, including those in the S&P 500, received larger pay increases than those at small cap companies, “showing that even the slowdown in pay rises was not experienced by the whole economy,” according to the report.
In some cases, the pay increases were dramatic, with 30 CEOs receiving total compensation increases of 1,000% or more.
The sharpest pay increase went to Richard Fairbank, CEO of the bank Capital One, whose total compensation went up 46,574% last year.
Top executives at retail business and builders had the most significant median declines in total annual compensation.
While most of the data in the study comes from regulatory forms filed for fiscal year 2007 before economic conditions deteriorated sharply, the study still reflects a disparity between executive pay and the challenges facing rank-and-file employees, said Paul Hodgson, senior research associate at the Corporate Library.
“You’re still seeing a dichotomy between the experience of some employees that may be losing their jobs and the CEOs who don’t seem to be as affected,” Hodgson said.
Indeed, some of the highest paid executives in the study were at companies that have since collapsed or been forced into mergers.
Richard Fuld, former CEO of Lehman Brothers, the brokerage that went under in September, was the 13th highest-paid executive of the 30 highest paid executives in the study. Fuld took home $71.92 million in total compensation last year, including more than $40 million in value realized from stock options.
The third highest-paid executive on the list was Angelo Mozilo, former CEO of Countrywide Financial Corp. Bank of America (BAC, Fortune 500) bought Countrywide in March after the nation’s largest home lender reported huge losses on subprime loans.
Mozilo’s total actual compensation for 2007 was $124.69 million, according to the study.
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