Executive compensation continues to soar, even for many CEOs whose job performance has been terrible. These five companies paid the most to CEOS while their stocks did little for shareholders.I have a friend living in Harlem who works at a clothing shop in midtown Manhattan several days a week to help pay her way through college. When she hustles on the job, has a little luck and "makes her numbers" for the month, she'll get an extra $100 bonus on top of the $850 she earns in the $8.50-an-hour job. If not, she has trouble paying her bills.
Now let's contrast her situation with that of another New Yorker, Richard Parsons, who works just a few blocks away as chief executive and chairman of Time Warner (TWX, news, msgs). Granted, his job is much more complex than working at a clothing shop. But no matter how you slice it, one of the main tasks Time Warner shareholders pay him for is to "make his numbers" -- so that the stock goes up and they are rewarded.
At this job, Parsons has failed badly. He has been CEO since May 16, 2002, during which time the stock has advanced 16%, compared with a 44% gain for the S&P 500 index ($INX). Time Warner stock also lost 31% in the five years ending in December, 2006.
And yet, despite having "missed his numbers" big time -- at least from a shareholder perspective -- Parsons has collected a juicy cash bonus of $7.5 million to $8.5 million in each of the past four years. Minus taxes, the $32 million in bonus for 2003-2006 that Time Warner's board has lavished on Parsons -- even though he let shareholders down -- would cover four years worth of state-school tuition for about a thousand students.
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