78.5 F
San Fernando
Tuesday, Nov 28, 2023


The president and chairman of Van Nuys-based tire maker Superior Industries International Inc. was the San Fernando Valley’s highest paid public-company executive in 1998, with a compensation package totaling $6.7 million. But if that sounds like a lot, consider that it’s much less than former Foundation Health Systems Chairman Malik H. Hasan earned in 1997 to earn the top spot on last year’s list: $18.4 million. In fact, across the board, public-company executives in the Valley earned far less in 1998 than previous years. Hasan, for example, who resigned from the company in March, earned a mere $1.6 million in 1998. Foundation itself has seen earnings drop since merging with Health Systems. Also struggling on Wall Street is Walt Disney Co., and that shows up in the compensation package for Disney CEO and Chairman Michael Eisner. In 1997, he received a $9.9 million bonus; in 1998 his bonus came to $5 million. Actually, Eisner wasn’t even the highest-paid executive at Disney last year. That honor went to Thomas O. Staggs, executive vice president and chief financial officer, who pulled in $6.5 million in 1998, pushing him to the No. 2 spot on the Business Journal’s list. Staggs surpassed Eisner because of his $5.4 million in long-term compensation or stock options. The $5.4 million represents the buy price of those options, which may be worth considerably more if Disney stock rises. Eisner has no long-term compensation because he cashed out all his stock options in 1996, bringing his compensation package to $204 million that year. As usual, stock options accounted for a greater part of executive pay than straight salaries, according to Joshua Lurie, president and CEO of Joint Information Inc., a research and consulting firm that compiled the list for the Business Journal. “A huge percentage of the overall compensation comes from long-term stock,” said Lurie. “It’s used as an incentive to keep them where they are.” For most of the top executives on this year’s list, long-term compensation accounted for more than half their pay, sometimes as high as 75 percent. For example, Gordon M. Binder, chairman and CEO of Amgen Inc. and No. 3 on the list, pulled in $6 million, most of it in stock options. This year’s list featured most of the same names as last year’s, such as the heads of Wellpoint Health Networks Inc., Litton Industries Inc., Amgen, Disney and others. “It doesn’t surprise me that entertainment and technology-type companies are at the top of the list,” said Lurie. “When you deal with technology and entertainment, which are content-oriented companies, those are the companies pushing forward with the Internet.” And with Internet companies currently in favor on Wall Street, that means well-paid CEOs. Aside from Foundation Health, all the companies on this year’s list turned a profit in 1998, and most had a healthy return on equity, in the 10 percent to 30 percent range. A 20 percent return on equity is considered good. The highest paid executives were mostly based at firms in the West Valley area, primarily Woodland Hills. Lurie said amount of compensation, ranging from $1 million to $6 million, is not unusual. “The bottom line is, in this day and age it takes a lot of experience to run a multibillion-dollar multinational corporation,” Lurie said. “If you look at the different compensation of chief executives, the numbers are pretty much in line.”

Previous article
Next article

Featured Articles

Related Articles