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Published: Saturday, 5/26/2012 - Updated: 2 years ago

CEO pay in U.S. hits record high

Compensation was $9.6M in 2011, up 6% from 2010

BLADE STAFF AND NEWS SERVICES
David Simon, CEO of at firm that runs malls, is on track to be the highest-paid, at $137 million. David Simon, CEO of at firm that runs malls, is on track to be the highest-paid, at $137 million.
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NEW YORK -- Profits at big U.S. companies broke records last year, and so did pay for chief executive officers.

The head of a typical public company made $9.6 million in 2011, according to an analysis by the Associated Press using data from Equilar, an executive-pay research firm.

That was up more than 6 percent from the previous year and is the second year in a row of increases. The figure is also the highest since the AP began tracking executive compensation in 2006.

Companies trimmed cash bonuses but handed out more in stock awards.

The typical CEO got stock awards in 2011 worth $3.6 million, up 11 percent from the year before. Cash bonuses fell about 7 percent, to $2 million.

The value of stock options, as determined by the company, climbed 6 percent to a median $1.7 million. Options usually give the CEO the right to buy shares in the future at the price they're trading at when the options are granted, so they're worth something only if the shares go up.

BY THE NUMBERS

WASHINGTON -- David Simon of Simon Property received a pay package worth more than $137 million for last year, and the typical CEO took home $9.6 million, according to an analysis by the Associated Press.

HOW LONG IT TAKES OTHERS TO MAKE THAT MUCH: A minimum-wage worker -- paid $7.25 an hour, as some workers at Simon malls are -- would have to work one month shy of 9,096 years to make what Mr. Simon made last year.

A person making the national median salary, $39,312 by AP calculations, would have to work 3,489 years.

BY THE HOUR: Assuming Mr. Simon worked a 60-hour week, his pay was $43,963.64 an hour, or $732.73 a minute.

To put that in perspective, the minimum-wage worker would have to labor for nearly three years to make what Mr. Simon makes in an hour. The average U.S. worker makes slightly less in one year than Mr. Simon makes in an hour.

Profit at companies in the Standard & Poor's 500 stock index rose 16 percent last year in an economy that grew more slowly than expected.

The typical American worker would have to labor for 244 years to make what the typical boss of a big public company makes in one.

The median pay for U.S. workers was about $39,300 last year, up 1 percent from the year before but not enough to keep pace with inflation.

Since the AP began tracking CEO pay five years ago, the numbers have seesawed. Pay climbed in 2007, fell during the recession in 2008 and 2009, then jumped again in 2010.

To determine 2011 pay packages, AP used Equilar data to look at the 322 companies in the S&P 500 that had filed statements with federal regulators through April 30.

To make comparisons fair, the sample includes only chief executives in place for at least two years.

Among other findings:

David Simon, CEO of Simon Property, which operates malls around the country, is on track to be the highest-paid in the AP survey, at $137 million. That was almost entirely in stock awards that eventually could be worth $132 million; some won't be redeemable until 2019.

Mr. Simon's paycheck looks paltry compared with that of Apple CEO Tim Cook, whose pay package was valued at $378 million when he became CEO in August. That was almost entirely in stock awards, some of which won't be redeemable until 2021, so the value could change dramatically.

Mr. Cook wasn't included in the AP study because he is new to the job.

Of the five highest-paid CEOs, three were also in the top five the year before.

All three are in the TV business: Leslie Moonves of CBS at $68 million, David Zaslav of Discovery Communications, parent of Animal Planet, TLC, and other channels, at $52 million, and Philippe Dauman of Viacom, which owns MTV and other channels, at $43 million.

Leslie Wexner of Columbus-based Limited Brands is the highest-ranked Ohioan on the list, at No. 33. He was paid $19.2 million last year, down 6 percent from 2010.

Some of the companies under Limited Brands' umbrella are Victoria's Secret, Bath and Body Works, and Pink. It has spun off such brands as Abercrombie & Fitch, Limited Too, Structure, Express, and Lerner New York.

No CEOs from Toledo-area companies are on AP's list of the 50 highest-paid CEOs.

Gary Heminger of Findlay-based Marathon Petroleum would rank with Mr. Wexner at $19.2 million, but the Associated Press included only companies that had the same CEO for all of 2010 and 2011. Mr. Heminger took over as CEO last July.

Marathon Petroleum ranked No. 31 on Fortune magazine's list of the largest U.S. companies this year.

A Blade review in April ranked Dana Holding Corp.'s Roger Wood ($10.7 million) and Owens Corning's Mike Thaman ($9.3 million) behind Mr. Heminger on the list of best-paid local executives.

The study also found:

● About two in three chief executives got raises.

For 16 CEOs in the sample, pay more than doubled from a year earlier, including Bank of America's Brian Moynihan (from $1.3 million to $7.5 million), Marathon Oil's Clarence Cazalot, Jr., (from $8.8 million to $29.9 million), and Motorola Mobility's Sanjay Jha (from $13 million to $47.2 million).

● Chief executives running health-care companies made the most, an average of $10.8 million. Those running utilities made the least, about $7 million.

● Perks and other personal benefits, such as hired drivers or personal use of company airplanes, rose only slightly, and some companies cut back, saying they wanted to align their pay structure with "best practices."

The typical pay of $9.6 million that Equilar calculated is the median value, or the midpoint, of the companies used in the AP analysis. In other words, half the CEOs made more and half less.

To value stock awards and stock options, the AP used numbers supplied by the companies. Those figures are based on formulas the companies use.



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