Second Runner-Up: John McGlade, Air Products & Chemicals
The Pennsylvania-based supplier of hydrogen, helium and other specialty gases has been in business since 1940, with annual revenues approaching $10 billion and earnings of more than $1 billion. McGlade earned total direct compensation in 2012 of $9.07 million, yet Air Products & Chemicals (NYSE:APD) stock has achieved a total return of just 6.4% since the end of 2011. Dividends accounted for half that.
Since McGlade became CEO on OCt. 1, 2007, APD’s stock has achieved a total return of 3.1%, one-fifth the return of the SPDR S&P 500 ETF (NYSE:SPY). In that time, he has earned total direct compensation of $52.4 million, which averages out to slightly more than $10 million per annum. That’s a lot of money to pay for almost no performance.
Air Products’ 2012 proxy states the following: “… directly tying compensation to total shareholder return can be a very ineffective way to pay. Although stock-price movements can be expected to reflect company performance over the long-term, on any given measurement date there can be aberrations that have little to do with the performance of the company or its management team.”
In APD’s case, it’s been a five-year aberration.