The 25 Most Overpaid CEOs

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Yahoo CEO Carol Bartz is the highest paid of all overpaid CEOs, says proxy advisory group Glass Lewis in a report on the 25 most overpaid CEOs on the S&P 500.

Glass Lewis determines which CEO is overpaid based changes in stock price operating cash flow, EPS, shareholder returns, return on assets, and a few other metrics.

Bartz’s 2009 compensation was $39 million, the bulk of which was stock options. (Those options weren’t recognised in 2009. She only got $5 million, really.)

She also received $10 million in restricted stock and cash to make up for leaving a position at Autodesk.

Glass Lewis argues that was way too much money. That the market value of what she forfeited was less than what Yahoo gave her. Plus, $10 million is almost as much as many executives on the list were paid.

More import than her compensation is what she did to earn it. Which isn’t much. Yahoo’s stock has basically been flat. The reason? People still don’t know what Yahoo is, or where it’s going.

Yahoo isn’t the worst offender in the group, though. And Bartz is not the only tech exec in the lot.

What follows is a list of the 25 companies that overpay their execs. Where possible, we’ve excerpted Glass Lewis’ reasoning for including the company.

#25 Valero -- William R. Klesse

CEO Compensation: $11,252,135

Stock Price Change (1 FY): -22.6%

Last fiscal year net income (millions): -$352

Return on Equity: -2.3%

#24 Macy's -- Terry J. Lundgren

CEO Compensation: $16,392,887

Stock Price Change (1 FY): 78%

Last fiscal year net income (millions): $350

EPS Growth (1 FY): 0%

Return on Equity: 7.5%

#23 Abercrombie & Fitch Co -- Michael S. Jeffries

CEO Compensation: $38,500,523

Stock Price Change (1 FY): 76.7%

Last fiscal year net income (millions): $79

EPS Growth (1 FY): -74.7%

Return on Equity: 4.3%

From Glass Lewis: 'The apparel retailer Abercrombie & Fitch not only had the second-highest level of CEO compensation on our overpaid list but also had the widest gap -- by far -- between the CEO's pay and those of the firm's other executives. The $38.5 million paid to CEO Michael S. Jeffries in 2009 exceeded the total compensation paid to the company's four other top executives -- combined -- by more than 360%. Mr. Jeffries's compensation included $33 million in the form of stock appreciation rights granted under his employment agreement with Abercrombie & Fitch. These stock appreciation rights cover 4 million shares of common stock and are designed to serve as retention incentives for an executive who has been with the company for almost two decades.'

#22 Allegheny Technologies -- L. Patrick Hassey

CEO Compensation: $8,552,769

Stock Price Change (1 FY): 75.4%

Last fiscal year net income (millions): $31.7

EPS Growth (1 FY): -94.3%

Return on Equity: 1.6%

#21 Motorola -- Gregory Brown/Sanjay K. Jha

CEO Compensation: $11,662,650

Stock Price Change (1 FY): 75.2%

Last fiscal year net income (millions): -$111

Return on Equity: -1.2%

#20 Coventry Health Care -- Allen F. Wise

CEO Compensation: $25,387,638

Stock Price Change (1 FY): 63.2%

Last fiscal year net income (millions): $315.3

EPS Growth (1 FY): -11.6%

Return on Equity: 8.8%

#19 Alcoa -- Klaus Kleinfeld

CEO Compensation: $14,338,538

Stock Price Change (1 FY): 43.2%

Last fiscal year net income (millions): -$985

Return on Equity: -8.2%

#18 News Corp. -- Rupert Murdoch

#16 Tesoro -- Bruce A. Smith

CEO Compensation: $8,504,951

Stock Price Change (1 FY): 2.9%

Last fiscal year net income (millions): -$140

EPS Growth (1 FY): -149.8%

Return on Equity: -4.4%

#16 MEMC Electronic Materials -- Ahmad Chatila

CEO Compensation: $16,652,259

Stock Price Change (1 FY): -4.6%

Last fiscal year net income (millions): -$68.3

EPS Growth (1 FY): -117.9%

Return on Equity: -3.2%

#15 Janus Capital -- Timothy K. Armour

CEO Compensation: $11,432,865

Stock Price Change (1 FY): 67.5%

Last fiscal year net income (millions): -$757.1

EPS Growth (1 FY): -622.7%

Return on Equity: -60.4%

#14 Harman -- Dinesh Paliwal

CEO Compensation: $5,690,152

Stock Price Change (1 FY): -54.6%

Last fiscal year net income (millions): -$422.6

EPS Growth (1 FY): 0.0%

Return on Equity: -36.5%

#13 Novell -- Ronald W. Hovsepian

CEO Compensation: $5,197,191

Stock Price Change (1 FY): -12.2%

Last fiscal year net income (millions): -$214.6

Return on Equity: -21.2%

From Glass Lewis: 'Ronald Hovespian of Novell, Inc., who was the lowest-paid CEO at an Overpaid 25 company on the S&P 500, received $5.2 million in total compensation in fiscal year 2009. Although this pay level is quite reasonable compared with that of Ms. Bartz, or even with the average CEO pay for the S&P 500 index, Novell's pay was high relative to performance, earning the company a spot on our Overpaid 25 list due to its severe underperformance compared to peers. In fact, with a decline in stock price of 12% and return on equity of negative 21.2%, Novell has landed on our Overpaid 25 list for the second year in a row.'

#12 Lockheed Martin -- Robert J. Stevens

CEO Compensation: $21,729,841

Stock Price Change (1 FY): -10.4%

Last fiscal year net income (millions): -$3,024

EPS Growth (1 FY): -2.4%

Return on Equity: 86.4%

#11 CB Richard Ellis Group -- Brett White

CEO Compensation: $7,729,213

Stock Price Change (1 FY): 214.1%

Last fiscal year net income (millions): $33.3

EPS Growth (1 FY): 0.0%

Return on Equity: 9%

#10 Nabors Industries -- Eugene M. Isenberg

CEO Compensation: $38,236,842

Stock Price Change (1 FY): 82.9%

Last fiscal year net income (millions): -$85.5

EPS Growth (1 FY): -117.9%

Return on Equity: -1.7%

#9 Donnelley, R.R. & Sons -- Thomas J. Quinlan

CEO Compensation: $10,250,792

Stock Price Change (1 FY): 64%

Last fiscal year net income (millions): -$27.3

Return on Equity: -1.2%

#8 Capital One -- Richard D. Fairbank

CEO Compensation: $10,076,485

Stock Price Change (1 FY): 20.2%

Last fiscal year net income (millions): $986.6

EPS Growth (1 FY): 617.3%

Return on Equity: 3.7%

#7 Dow Chemical -- Andrew N. Liveris

CEO Compensation: $16,328,954

Stock Price Change (1 FY): 83.1%

Last fiscal year net income (millions): $538

EPS Growth (1 FY): -63.4%

Return on Equity: 3.1%

From Glass Lewis: 'The Dow Chemical Co. also made changes to its compensation program, but in this case for the worse. In early 2009, the chemical company's compensation committee exercised its discretion to change the annual cash incentive program from one with financial targets to one without. The committee's members, believing they could not set accurate financial goals in a volatile marketplace, instead elected to combine a qualitative review of financial performance with a subjective review of individual performance. Under this approach, the committee granted approximately $10.8 million in discretionary cash awards in 2009. Given the size of this cash payout, we believe this approach affords the compensation committee too much discretion. In addition, we do not believe objective performance metrics are only appropriate in stable market conditions, when executives are more likely than not to meet pre-established targets.'

#6 Sprint -- Daniel R. Hesse

CEO Compensation: $10,273,747

Stock Price Change (1 FY): 100%

Last fiscal year net income (millions): -$2,436

Return on Equity: -12.8%

From Glass Lewis: 'This wireless communications company, which has been a perennial member of our Overpaid 25 list for the S&P 500, continued overcompensating its executives in 2009. Although Sprint Nextel failed to post a profit for the third straight year, the company paid its top five executives an estimated $26 million, with $10.3 million going to CEO Daniel Hesse.'

#5 Yahoo -- Carol Bartz

Company: Yahoo Inc

CEO Compensation: $38,988,230

Stock Price Change (1 FY): 37.5%

Last fiscal year net income (millions): $598

EPS Growth (1 FY): 30.6%

Return on Equity: 5%

From Glass Lewis: 'As the highest-paid CEO on our S&P 500 Overpaid list, Ms. Bartz represents a problem we find at many other firms with poor pay-for-performance grades: excessive compensation awarded to executives to encourage them to join or remain with a company.'

#4 XL Group -- Michael S. McGavick

CEO Compensation: $6,202,815

Stock Price Change (1 FY): 395.4%

Last fiscal year net income (millions): $75

Return on Equity: .9%

#3 Chesapeake Energy -- Aubrey K. McClendon

#2 Aetna -- Ronald A. Williams

CEO Compensation: $17,760,136

Stock Price Change (1 FY): 11.2%

Last fiscal year net income (millions): $1,276.5

EPS Growth (1 FY): -.65%

Return on Equity: 14.4%

From Glass Lewis: 'Ronald Williams, chairman, president and CEO of Aetna, received an estimated $17.8 million in total compensation in 2009, despite receiving only half of his target bonus and no performance stock unit payouts due to the company's disclosed failure to meet its own financial goals.'

#1 Micron -- Steven R. Appleton

CEO Compensation: $8,448,639

Stock Price Change (1 FY): 73.8%

Last fiscal year net income (millions): -$1,835

Return on Equity: -33.9%

From Glass Lewis: 'Micron Technology's performance has steadily deteriorated during the past three years, culminating in a $1.8 billion loss in 2009 and a return on equity of negative 33.9%, one of the lowest among the companies appearing on our Overpaid 25 list.'

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