[SOUNDS FAIR TO ME! WHY NOT $1M FOR EVERY 1000 WORKERS?]
Xerox chief gets $6.5M bonus
Allaire's bonus rises by more
than $2 million, proxy shows
April 9, 1998: 8:11 p.m. ET
NEW YORK (CNNfn) - Xerox Chairman
and Chief Executive Officer Paul Allaire's
1997 bonus increased by more than $2
million to nearly $6.5 million, according to
a proxy statement filed Thursday.
While Allaire's salary only grew from
$958,333 to $975,000 from 1996 to
1997, his bonus rose from $3,964,900 to
$6,479,449.
The news comes just days after the
Stamford, Conn., document processing
company announced it would cut 9,000
jobs worldwide in a restructuring effort
designed to make it more competitive.
Allaire's total bonus was divided
between the company's executive
performance incentive plan and its
long-term incentive plan. The executive
performance portion was $2 million and
long-term incentives amounted to
$4,479,449.
His 1997 compensation represents a
large jump from the two previous years.
In 1995, Allaire's base pay was $858,333
and total bonus $3,308,499. In 1996,
base pay increased by $100,000 to
$958,333 and his bonus totaled
$3,964,900.
Other compensation from 1995-97
gradually decreased from $184,606 in
1995 to $133,250 last year.
Allaire joined the company in 1966 and
has been on its board since 1986.
While Allaire's compensation has been
on the rise during the three-year period,
so too has the company's profits.
Xerox's profits have grown from a loss
of $472 million, or $1.75 a share, in 1995
to a profit of $1.45 billion, or $4.04 a
share in 1997.
The news comes on the same day that
the AFL-CIO released a new survey
showing the average chief executive
officer at America's largest corporations
received a 38 percent pay increase last
year while the average worker received
only a 2.9 percent increase.
"There's no question that executive
compensation is out of control," AFL-CIO
Secretary-Treasurer Richard Trumka said.
The AFL-CIO said it will work with
shareholder activists to push for proxy
votes against large pay hikes.
"While CEOs get multimillion dollar
sweetheart deals, working families suffer
downsizings and layoffs," Trumka said.
Xerox (XRX) closed at 113, up 1 from
Wednesday's close.
Copyright © 1998 Cable News Network, Inc.
ALL RIGHTS RESERVED.
=============================
AFL-CIO Researches Executive Pay
Thursday, April 9, 1998; 2:48 p.m. EDT
WASHINGTON (AP) -- Pointing to reports of a 38 percent
increase in compensation top American executives
received last year, the AFL-CIO released a report
Thursday that asserted ``boardrooms are rigged to
overpay CEOs.''
``CEOs get multimillion-dollar sweetheart deals.
Meanwhile, working families worry about downsizings and
layoffs,'' said AFL-CIO Secretary-Treasurer Richard
Trumka, who said there was ``an obscene difference''
between the average worker's pay and ``elite CEO's
paycheck.''
Trumka spoke at a press conference Thursday held to
draw attention to the labor federation's ``Executive Pay
Watch'' Website and release a study of what the AFL-CIO
called ``significant personal, financial and business''
conflicts between chief executive officers and the
corporate compensation committee members who set
their salaries.
The federation launched its Website last year to let
workers compare their salaries with their bosses' total
compensation and voice complaints in electronic
messages to Congress. The site has had 4.6 million hits.
According to a Sunday New York Times analysis of more
than half the nation's top 500 publicly held companies,
executive pay climbed 37.8 percent in 1997, to an
average of $8.7 million per corporate chief.
The Times survey found that one in 10 chief executives
had pay packages worth at least $20 million. A year
earlier, that number was one in 40.
Most CEO pay is linked to the performance of their
corporation's stock. But the AFL-CIO believes one reason
compensation is so generous is that members of the
committees that set executive salaries are too close to
their CEOs.
For example, the study, ``Too Close for Comfort: How
Corporate Boardrooms are Rigged to Overpay CEOs,''
reported that one CEO jointly owned a vacation home in
the Florida Keys with a member of his company's
compensation committee.
``Our study shines the spotlight on such CEOs who have
close, often personal ties to the very boards which can
rubber stamp their outrageous pay packages,'' Trumka
said.
The Internet address is www.paywatch.org.
© Copyright 1998 The Associated Press
=============================
U.S. Labor Says Executive Pay Out of Control
10:45 p.m. Apr 09, 1998 Eastern
By Tim Dobbyn
WASHINGTON (Reuters) - The average chief executive officer at one of
America's biggest companies got a 38 percent
raise last year while the typical worker received only 2.9 percent,
representatives of organized labor said Thursday.
``There's no question that executive compensation is out of control,''
AFL-CIO Secretary-Treasurer Richard Trumka told a
press conference.
The typical full-time worker got a 2.9 percent raise in 1997, he said.
``While CEOs get multimillion dollar sweetheart deals, working families
suffer downsizings and layoffs,'' said Trumka.
The level of executive pay at U.S. corporations has grown sharply in recent
years, boosted by share option packages that
have, in turn, grown because of the rising stock market.
AFL-CIO said International Business Machines Corp. CEO Louis Gerstner made
$148 million in compensation and stock
options in 1997, or 5,785 times the average worker's salary.
With one-in-10 executives getting annual packages worth over $20 million,
the AFL-CIO said it is joining with shareholder
activists to promote proxy votes against huge pay increases.
The 72-union AFL-CIO released a report that highlighted the lack of
independence among members of compensation
committees that set CEO pay.
``Our data suggest the executive compensation system remains under the
influence of the very executives it purports to
supervise, who, in turn, rely on networks of personal relationships to
frustrate the intentions of regulators and
shareholders,'' it said.
In one example, the AFL-CIO report said Georgetown University basketball
coach John Thompson was paid $350,000 by
Nike Inc. in 1997 for an endorsement contract while serving on the athletic
shoe company's compensation panel.
The AFL-CIO called on the Securities and Exchange Commission to tighten up
the reporting of relationships between
senior executives and directors.
It said SEC rules presently did not require reporting of relationships with
nonprofit organizations where a director was an
employee or trustee.
Although many workers are now shareholders in their companies and benefit
from good financial performance, the
AFL-CIO said executive salaries were out of all proportion.
AFL-CIO Office of Investment Director Bill Patterson said high pay seemed to
be the order of the day whether the
company was doing well or poorly.
``Good performing companies use the rational that they want to reward good
performance and poorly performing
companies say they need to properly incentivize management for a
turnaround,'' Patterson said.
But American Enterprise Institute economist Marvin Kosters said the pay for
top executive talent was largely market
driven.
``In many ways executive compensation bears some relationship to the
packages paid to top sports stars and musicians,''
Kosters said. ``People find it easier to understand why Michael Jordan is
paid to play basketball.''
AFL-CIO has a PayWatch website at www.paywatch.org where people can view its
report and compare CEO salaries with
their own.
Copyright 1998 Reuters Limited.
=============================
The Wall Street Journal Interactive Edition -- April 9,
1998
Who Made the Biggest Bucks
The stampede of corporate leaders rushing to profit from
the long bull market grew last year. A handful really struck
pay dirt when they cashed in large numbers of stock
options.
The list of highest-paid CEOs for 1997, based on William
M. Mercer Inc.'s compensation survey, reflects the
executives' gains from exercising options and other
long-term incentive payouts as well as salary, bonus and
the value of their restricted-stock grants.
For the first time, Mercer also tracked the value of shares
owned by chiefs at the end of their companies' 1997 fiscal
year plus each concern's 1997 total shareholder return --
the change in stock price plus declared dividend
payments. The median value of CEOs' stakes was nearly $8
million, while the median total shareholder return, or TSR,
equaled 29.7%.
Here's a look at last year's top earners:
Sanford I. Weill, Travelers Group Inc., with total
direct compensation of $230.5 million. This hefty
figure includes a $220.2 million gain from exercising
stock options and restricted stock valued at
$777,322 at the time of the grant. Mr. Weill also
appeared on last year's scorecard. His equity stake
was valued at $796.2 million at year end. Travelers
had a TSR of 79.9%.
Philip J. Purcell, Morgan Stanley Dean Witter & Co.,
whose total direct compensation reached $50
million. That largely resulted from $36.4 million in
stock-option gains and restricted stock valued at
$3.1 million at time of grant. His shares were valued
at $67.8 million by the close of 1997. Morgan Stanley
had a TSR of 50.9% last year.
Robert B. Shapiro, Monsanto Co., $49.3 million,
including $46.7 million in stock-option gains and
$750,365 in long-term incentive payouts. He owned
shares valued at $47.4 million at the end of a year in
which shareholders had a total return of 20.1%,
below the survey median.
John F. Welch Jr., General Electric Co., $39.8 million,
which primarily reflects $31.8 million from exercising
options. His stock had a year-end value of $61.9
million. TSR was 50.9%. This marks Mr. Welch's third
straight year on the scorecard.
Harvey Golub, American Express Co., $33.2 million,
including $27.1 million in option gains and $2.9
million in long-term incentive payouts. He owned
shares valued at $39.3 million at year end. TSR
equaled 59.8%.
Charles A. Heimbold Jr., Bristol-Myers Squibb Co.,
$29.2 million, which includes $25.3 million from
cashing in options and $1.1 million in long-term
incentive payouts. His equity stake was valued at $25
million at year end. The company had a TSR of 77%.
Lawrence A. Bossidy, AlliedSignal Inc., $28.2 million,
which mainly reflects $23.1 million in option gains. He
owned stock valued at $34.7 million. Investors saw
returns of 17.4%, far below the survey median.
William C. Steere Jr., Pfizer Inc., $28.1 million,
resulting from $15.4 million in option gains and $8.8
million in long-term incentive payouts. His year-end
stake was valued at $40.3 million, while TSR was
81.9%.
Copyright © 1998 Dow Jones & Company, Inc. All Rights Reserved.
=============================
