Though some Silicon Valley bigwigs earned only $1 in 2010, the median income for CEOs at the largest tech companies rose by 37%, according to a new report by Equilar, a research firm that tracks executive and board compensation.
This compares with chief executives in the Standard & Poor’s 500, who saw a pay bump of 28% between 2009 and 2010.
While Silicon Valley CEOs don’t make the heftiest salaries (especially since many of them are smaller than many of the blue-chip firms in the S&P 500), this increase does seem to indicate that the tech sector is rebounding faster than others.
“The earnings came in and they were quite good, reflecting the economic recovery,” Robin Ferracone of Farient Advisors, a corporate pay consulting firm, told the San Jose Mercury News. “And the executives got paid as a result.”
The median compensation package in Silicon Valley was about $2.8 million while CEOs in the S&P 500 received median pay of approximately $9 million. But the 37% bump in tech firm CEO pay is particularly notable given that it had been on the decline by between 5% and 6% in the past two years.
Salary, plus bonus, plus stock options
Given the criticism related to perceived exorbitant executive pay following the economic downturn, compensation packages now commonly include cash and stock incentives that are connected to a company’s internal business goals.
These performance goals may have been easier to reach in 2010, as the economy continued to rebound from a recession. “They’re setting targets based on the results of the previous year,” David Eaton, an executive pay expert at the Glass, Lewis shareholder advisory firm, told the San Jose Mercury News. As the economy bounced back, these goals for 2010 were “not that hard to hit,” Eaton said.
Some observers, however, noted that these augmented CEO paychecks don’t match the shareholder returns, which improved only slightly from 21% in 2009 to 23% in 2010.
Money, money, money
According to the San Jose Mercury News, here’s what some of the Valley’s big shots made in 2010:
• Larry Ellison, Oracle: For the third year in the row, Ellison tops the list of Silicon Valley CEOs when it comes to income. Though he took a 17% pay cut in 2010 and took only $1 in salary, he took $6.4 million in incentive cash and stock options valued at $61.9 million for total pay of $70 million.
• Steven Laub, Amtel: On the scale of highest paid Valley CEOs, Laub jumped from 13th in 2009 to 2nd in 2010. Laub earned a salary of about $750,000, but he also received a performance bonus and stocks for a total package worth nearly $19.4 million.
• Jure Sola, Sanmina-SCI: With compensation that grew 566%, from $1.1 million in 2009 to $7.45 million in 2010, Sola saw the biggest pay increase in 2010. His take-home pay included stock options and a $1.4 million bonus for exceeding internal revenue goals.
• John Chambers, Cisco Systems: Though shareholders saw only a 5% return in 2010, Chambers’ compensation more than doubled from $9.1 million in 2009 to $18.8 million in 2010, thanks to a bonus plus a stock grant and options.
• Steve Jobs, Apple: Though Apple reported $14 billion in profit in 2010—the highest in the Valley—Jobs drew a salary of $1, his modus operandi for years. Jobs has a personal fortune estimated at $8.3 billion.
