<B>Top CEO salaries worldwide</B>

IE Focus

27 May 2004

On average, the CEO of a publicly traded Japanese firm earns around 40 million yen, or €300,000, a year. This is nine times the average pay of a young graduate, and 35 times less than your typical American boss.

Detailed revelations of CEO pay in Japan is not normally made public; however, starting this year, annual reports will list an overall salary figure for executives sitting on boards. Some firms, like Nissan, have got ahead of the curve, which is how it has become common knowledge that the country’s best-paid president is Carlos Ghosn. Nissan’s top nine directors were paid collectively 1.3 billion yen last year - not counting stock options, which took off after Ghosn arrived. Japan’s richest bosses, however, still seem to be those who have started their own companies.

Bosses’ pay in Germany is at the center of a heated debate just now. Every day, the popular newpaper “Bild” prints a list of the salaries of 100 public figures and average citizens, along with their photos. The Mannesmann trial, which is currently targeting Josef Ackermann, is largely responsible for awakening public interest and fomenting the new transparency. The head of Deutsche Bank, along with other former members of the Mannesmann board, is charged with handing out overly generous rewards to the group’s directors when it was bought by Vodafone. A special commission that looked into the matter in 2002 suggested that Germany’s publicly traded firms publish their top management’s income, either individually or collectively. The prize last year went to Ackermann, with €12.5 million, including bonuses and options, followed by DaimlerChrysler’s Jurgen Schrempp (€11.8 million).

According to a report by The Work Foundation, average salary of Great Britain’s FTSE 100 directors hit £579,000 (€856,000) last year, an incredible rise of 92 percent – especially when considering that inflation climbed 25 percent. The Independent Remuneration Solutions office (IRS), which looked into annual reports of the nation’s nine largest publicly traded corporations, says pay for their directors was up, on average, 24 percent in 2003, while these companies’ stock prices rose only 15 percent. According to the IRS report, Jean-Pierre Garnier of GlaxoSmith-Kline earned £10 million (€14.8 million) last year, followed by Lord Browne, director-general of BP, with £9 million (€13.3 million). Eric Daniels of Lloyds TSB made £2 million, or €3 million).

After two years when salaries slumped in America, compensation (which includes all forms of remuneration: salaries, bonuses, stock options and preferred stock) for U.S. CEOs shot back up in 2003. Business Week reports that CEOs at 365 of 500 Standard & Poor firms studied made over $8 million, or 9 percent more than 2002. Among the highest-paid: Reuben Mark (Colgate-Palmolive) with $141 million; Steve Jobs (Apple), $74 million; George David (United Technologies), $70 million; and Henry Silverman (Cendant) and Sanford Weill (Citigroup) with $54 million each. Compensation, of course, does not always reflect company performance. Margaret Whitman, CEO of eBay, earned $3.4 million while her company paid back its shareholders nearly 300 percent over three years. On the other end of the scale, Jozef Straus, CEO of JDS Uniphase, pocketed $152 million during the same three-year period, while his stockholders lost 91 percent of their investments. Oracle’s Larry Ellison likewise took home $750 million in three years while his investors’ take dropped by more than half. CEOs of megacorporations, like GE or IBM, are still among the highest-paid, with $11 million for Jeff Immelt and $7.7 million for Sam Palmisano.


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