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Friday, January 27, 2012
Tuesday, January 10, 2012
CEO’s and Their Outa Control Pay?... Or Is It???
Apple CEO Tim Cook could top pay list in 2011 | The Salt Lake Tribune:
What do you think about pay for executives. In publically traded companies, the CEO often gets paid 500 to 5,000 times what the average employee of the firm makes. Mostly stock options, actually, so the options are worth more if the stock performs over time, and worth less (worthless) if the company stock does well.
Let's take Cook from Apple. He gets almost $400m. That's quite a bit up from Jobs who got paid a lonely $1 per year (before taxes and deductions:-). Of course, Steve owned a lot of stock as the founder so he made up for the paltry salary when the company and its stock did well.
So Let's compute. Say that the average salary at apple is $100k (far more if you don't count outsourced production, far less if you do).
Cook makes $378,000,000 divided by the average of $100,000 = 3,780 times what the average worker makes. See company's SEC filings or visit an artile like this one from the Salt Lake Tribute (Shima, 2011).
Is Cook worth it?
Stated differently, if we fired Cook, we could hire another 4,000 employees.
When you do this analysis, make sure to separate the owner-founders from the professional managers of the companies.
What's a leader really worth?
Hmmm...
References
Shima, R. N. (2011, January 10). Apple CEO Tim Cook could top pay list in 2011. Salt Lake Tribute. Retrieved from: http://www.sltrib.com/sltrib/money/53269308-79/million-cook-stock-apple.html.csp
Let's take Cook from Apple. He gets almost $400m. That's quite a bit up from Jobs who got paid a lonely $1 per year (before taxes and deductions:-). Of course, Steve owned a lot of stock as the founder so he made up for the paltry salary when the company and its stock did well.
So Let's compute. Say that the average salary at apple is $100k (far more if you don't count outsourced production, far less if you do).
Cook makes $378,000,000 divided by the average of $100,000 = 3,780 times what the average worker makes. See company's SEC filings or visit an artile like this one from the Salt Lake Tribute (Shima, 2011).
Is Cook worth it?
Stated differently, if we fired Cook, we could hire another 4,000 employees.
When you do this analysis, make sure to separate the owner-founders from the professional managers of the companies.
What's a leader really worth?
Hmmm...
References
Shima, R. N. (2011, January 10). Apple CEO Tim Cook could top pay list in 2011. Salt Lake Tribute. Retrieved from: http://www.sltrib.com/sltrib/money/53269308-79/million-cook-stock-apple.html.csp
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