The 10 Best-Paid CEOs of 2012

by Alyssa Oursler | April 10, 2013 7:00 am

3381885 money in the hands e1283372289994 The 10 Best Paid CEOs of 2012Plenty of people dream of climbing the corporate ladder to get the corner office with a view — and of course the lavish compensation that comes with it. But being the head honcho means more than just a hefty paycheck.

In 2012, for example, the money spent on perks like private jets and housing subsidies grew 18% year-over-year, according to preliminary data from Equilar reported by The New York Times[1] — as if the normal million-dollar paydays, stock options and bonuses aren’t enough.

Granted, perks still make up a tiny fraction of the overall pay despite that huge increase. But considering the median compensation for CEOs in 2012 came to more than $14 million, even a tiny fraction is more than what most of us take home over the course of 12 months.

Plus, many executives enjoy the extras even when they aren’t steering their companies to success. Shares of the company with the highest-paid CEO on this list, for example, ended 2012 with double-digit losses … and that’s while the S&P 500 enjoyed double-digit gains.

With that in mind, let’s take a look at the top 10 highest-paid CEOs[2] from last year, based on companies that had reported through March 29 and had at least $5 billion in annual revenue.

#10: Louis Camilleri, Philip Morris International

PhilipMorris185 The 10 Best Paid CEOs of 2012Total Compensation: $24.7 million
2012 Performance: +6%

First up, we have Louis Camilleri, who leads the pack at Philip Morris International (NYSE:PM[3]). He broke into the top 10 last year — after coming in at No. 27 in 2011 — thanks to a 23% increase in overall compensation. Tallying it all up, Camilleri took home just under $25 million.

His base salary stayed the same at $1.75 million, while he actually received less in bonuses and spent less on perks than the year before. Instead, stock compensation accounted for the increase, going from just over $9 million to more than $15 million.

In terms of performance, Philip Morris didn’t blow anyone away last year, though. The stock only gained just more than 6%, while earnings grew 2% for the full year. Still, PM’s total return came to 11% if you include the company’s hefty dividend — a payout the company admittedly has boosted by about 85% since 2008.

And, PM is off to a raging start in 2013. The stock has gained over 14% — 40% more than the broader market’s still-bullish start.

#9: Kenneth Chenault, American Express

AmericanExpress185 The 10 Best Paid CEOs of 2012Total Compensation: $28 million
2012 Performance: +19%

An increase in stock awards, along with a twice-as-large bonus, helped Kenneth Chenault climb up the list significantly this year. The American Express (NYSE:AXP[4]) CEO made 25% more in 2012 as he pocketed a bonus of $4 million and more than $18 million in stock compensation on top of his normal salary of $2 million. Plus, his perks again added up to around $1 million.

That was at least relatively well-deserved if you consider stock performance, though. AXP posted an impressive gain of 19% for the 12-month period … despite the fact that earnings slid 9% year-over-year. It also raised its dividend from 18 cents to 20 last year and is planning another 3-cent improvement this year — a 15% increase.

On top of that, the company has kicked off 2013 as a top-performing Dow Jones Industrial Average component, logging a first-quarter climb[5] of over 17%, which was only bested by tech comeback Hewlett-Packard‘s (NYSE:HPQ[6]) 67% start.

#8: Stephen Chazen, Occidental Petroleum

oxy The 10 Best Paid CEOs of 2012Total Compensation: $28.5 million
2012 Performance-21%

Stephen Chazen made even more money than Chenault last year … despite downright ugly performance. The Occidental Petroleum (NYSE:OXY[7]) CEO took home around $28.5 million on the year, even as earnings fell 30% and shares subsequently slid 21%.

Of course, lavish pay is hardly new for OXY … and hardly goes unnoticed. The company’s previous CEO, Ray Irani, was forced out in 2011[8] “amid activists’ complaints about excessive compensation and poor governance.”

Now, Chazen’s job is at stake. In February, the company’s board said it was seeking a successor for the relatively new OXY head honcho — something that has generated quite a bit of turmoil. In fact, many are even speculating that a break-up could be in the company’s future.

Still, Chazen seems to have plenty in his pockets to brace for an early exit.

#7: Howard Schultz, Starbucks

Starbucks185 The 10 Best Paid CEOs of 2012Total Compensation: $28.9 million
2012 Performance: +18%

Next up: a man who doesn’t just get a caramel macchiato whenever he feels like it, but a big pile of pay to go with it.

Perks for Starbucks (NASDAQ:SBUX[9]) CEO Howard Schultz were below the average, but his stock awards more than tripled, helping overall compensation grow an eye-popping 80% to just under $29 million.

Of course, that growth was only in terms of base compensation. According to the company’s annual statement in 2011, Schultz raked in $16 million in terms of the salary, perks, bonuses, stock and options considered in the NYT rankings. On top of that, he also was handed a $12 million retention award and saw his stock options appreciate $40.8 million in 2011.

That seems pretty justified considering his track record, though. As InvestorPlace editor Jeff Reeves pointed out in early 2012[10], Starbucks stock has made quite the comeback since Howard returned to the helm.

#6: John Donahoe, eBay

eBayNew185 The 10 Best Paid CEOs of 2012Total Compensation: $29.7 million
2012 Performance: +63%

Another high-flying stock whose CEO seems to have earned his keep: Ebay (NASDAQ:EBAY[11]), which posted gains of 63% in 2012 … and rewarded head honcho John Donahoe with just under $30 million.

Of course, the bulk of that 81% increase in compensation came from stocks. In 2011, Donahoe got $8.9 million in stock, while that tripled to around $23 million in 2012. If I were Donahoe, though, I’d sure love stock-based compensation, considering shares have blown out the doors by appreciating 370% since early 2009.

The CEO isn’t sitting still, either. He recently announced that the company is shooting to hit the $300 billion mark for e-commerce[12] in three years, while also doubling its active users. As he put it: “The turnaround is behind us, and we are now playing offense.”

If that offense pays off, Donahoe could be making a run for the top spot on this list in the next few years.

#5: Philippe Dauman, Viacom

Viacom The 10 Best Paid CEOs of 2012Total Compensation: $33.4 million
2012 Performance: +15%

Viacom (NASDAQ:VIAB[13]) CEO Philippe Dauman had a tough year in 2012. Year-over-year, his total compensation actually decreased by a grand total of 22%.

As you can tell by his spot in the top five, though, that’s a problem most of us would love to have. Even with that decrease, he still tallied up $33.4 over the course of the year. In fact, his bonus alone was $11.5 million, which itself would have earned him a spot on the top 100 list.

But it’s not like Viacom was slacking in 2012. The company climbed 15%, beating the market, and increased its dividend partway through the year. Plus, VIAB has already gained 17% in just the first few months of 2013, blowing away the S&P 500′s 10% start.

#4: Mark Parker, Nike

Nike The 10 Best Paid CEOs of 2012Total Compensation: $35.2 million
2012 Performance: +7%

Overall, Mark Parker’s pay more than tripled from 2011 to 2012. The main reason? A huge stock award that came last May. Nike (NYSE:NKE[14]) gave its leader a whopping 190,000 shares, bringing his total stock awards for the year to more than $23 million, compared to $3.5 million the year before.

The company had a decent year in 2012, with gains of 7%. But the board cited Parker’s[15] “exceptional leadership and critical role in driving Nike, Inc.’s growth strategy for years to come,” along with the company’s “strong, sustained financial performance” under his guidance as the reason for the huge payday.

The only caveat: Parker must stick around for five years. He can’t cash his stock in until 2017.

#3: Robert Iger, Disney

disney The 10 Best Paid CEOs of 2012Total Compensation: $37.1 million
2012 Performance: +30%

When it comes to Disney (NYSE:DIS[16]), the pay sure is outsized … but so are the gains. Robert Iger took home one giant salary, but also boasts being one of the top performers on this list and doubling the broader market.

Plus, his pay increase was relatively spread out across all categories: a $500,000 bump in base salary, $1 million bump in bonuses, nearly $200,000 more spent on perks, and $4 million more awarded via stocks and options. No crazy vacations or bonuses here. Or … well, nothing more crazy than usual.

And if you thought the media giant would run out of steam after its impressive run-up last year, think again. Already in 2013, shares have improved 15%.

#2: Richard Bracken, HCA

HCA185 The 10 Best Paid CEOs of 2012[17]Total Compensation: $38.6 million
2012 Performance: +37%

At a glance, Richard Bracken looks to be the king of perks, as more than half his giant $38.6 million compensation from HCA came in the form of special compensation.

Digging deeper, though, just about all of it was from dividends as opposed to forms of spending like private jets and club dues. The healthcare company paid three special dividends over the course of the year: a $2 per share payout in February, a $2.50 payout in November and another $2 dividend in December.

Other top HCA executives besides Bracken also went home happy. The top five officers’ pay totaled more than $113 million[18] last year, including $57.4 million in cash on their vested stock options.

The top dog himself also got a slight raise to $1.4 million in 2012, along with a twice-as-large year-over-year bonus of $3.6 million.

#1: Larry Ellison, Oracle

OracleLogo e1365428096815 The 10 Best Paid CEOs of 2012Total Compensation: $96.2 million
2012 Performance: +29%

The top spot on this list should hardly come as a surprise to most people. Oracle (NASDAQ:ORCL[19]) CEO Larry Ellison has been in the top three of the list for the past six years and more than doubles second-place Richard Bracken’s pay. Ellison’s total compensation stops just shy of $100 million.

The bulk of that came in stock, of course, but Ellison is the king of extras, too. He racked up a whopping $1.5 million in perks — nearly fives times the average — with most of that going toward security. As The New York Times reported: “He pays out of pocket for the installation and maintenance of home security systems; Oracle covers the cost of the security personnel.”

I guess on the bright side, Oracle outperformed in 2012, gaining almost 30%. But that’s even better for Ellison too, as a good chunk of his wealth is directly tied to that performance.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.

Endnotes:
  1. reported by The New York Times: http://www.nytimes.com/2013/04/07/business/executive-pay-shows-modest-2012-gain-but-oh-those-perks.html?pagewanted=1&_r=1&adxnnlx=1365424247-ATnf1NO3dNTJM6VF1vxbHw
  2. highest-paid CEOs: http://www.nytimes.com/interactive/2013/04/05/business/the-highest-paid-ceos.html?ref=business
  3. PM: http://studio-5.financialcontent.com/investplace/quote?Symbol=PM
  4. AXP: http://studio-5.financialcontent.com/investplace/quote?Symbol=AXP
  5. logging a first-quarter climb: http://investorplace.com/2013/03/the-5-best-5-worst-djia-stocks-of-q1-jnj-vz-xom-cat-aa/
  6. HPQ: http://studio-5.financialcontent.com/investplace/quote?Symbol=HPQ
  7. OXY: http://studio-5.financialcontent.com/investplace/quote?Symbol=OXY
  8. forced out in 2011: http://online.barrons.com/article/SB50001424052748703769504578396671532074456.html?mod=BOL_twm_fs#articleTabs_article%3D1
  9. SBUX: http://studio-5.financialcontent.com/investplace/quote?Symbol=SBUX
  10. pointed out in early 2012: http://investorplace.com/2012/01/starbucks-ceo-howard-schultz-compensation/
  11. EBAY: http://studio-5.financialcontent.com/investplace/quote?Symbol=EBAY
  12. $300 billion mark for e-commerce: http://slant.investorplace.com/2013/04/make-a-bid-for-ebay-stock/
  13. VIAB: http://studio-5.financialcontent.com/investplace/quote?Symbol=VIAB
  14. NKE: http://studio-5.financialcontent.com/investplace/quote?Symbol=NKE
  15. the board cited Parker’s: http://www.oregonlive.com/playbooks-profits/index.ssf/2012/05/nike_board_committee_gives_nea.html
  16. DIS: http://studio-5.financialcontent.com/investplace/quote?Symbol=DIS
  17. [Image]: http://investorplace.com/wp-content/uploads/2013/04/HCA185.jpg
  18. more than $113 million: http://nashvillepost.com/news/2013/3/15/special_dividends_send_hca_execs_pay_soaring
  19. ORCL: http://studio-5.financialcontent.com/investplace/quote?Symbol=ORCL

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