Every day, Michelle Leder and the crew at Footnoted.com comb through Securities and Exchange Commission financings to ferret out the highlights—and lowlights — of executive compensation. And every month, she joins us to discuss the findings. January got the year off to a good start.
Mad-den Money. In this day and age, few people enjoy lengthy tenure — the promise of lengthy, guaranteed employment -- except judges and college students. And Steve Madden, the founder and chief creative officer at the eponymous shoe company. Madden, who spent time in prison last decade after being convicted of stock fraud charges, can't serve as CEO of the company. But he still works for the firm. And he just signed up for a nice deal that will keep him employed or another decade. The agreement, which runs through 2023, promises a base of $5.41 million per year, a raise of about $2 million per year for the next several years, and a cash bonus, a grant of restricted stock worth $40 million, and another grant of stock worth $40 million. With that kind of coin, you'd think Madden would be more than able to pay off any loans he's taken out. But the company's board also agreed to forgive a $3 million loan he took from the company in 2007.
Expatriate Games. Aon, the big insurance company, is pulling up stakes from Chicago and moving to London. I guess the top brass prefers fish 'n' chips to bratwurst. London isn't typically regarded as a hardship assignment, but top executives will be compensated for the pain and expense of moving to one of the world's great cities. On top o the usual moving expenses and relocation costs, CEO Greg Case is getting a $135,000-per year "annual foreign service allowance," and another $28,000 months to cover housing and utilities costs. (Funny. Usually employees pay for their housing out of a thing called a "salary.") But it isn't all strawberries and cream for Case. The deal explicitly stipulated that he has to be pay or his own telephone and internet access.
Google Green for Greene. Being a corporate director is usually a pretty cushy gig. You get paid well to show up at a bunch of meetings and generally rubber-stamp the recommendations of top management. But being a director of a company like Google, which has a soaring stock price and healthy profit growth, is even cushier. Diane Greene, the founder of software firm VMWare, was appointed to Google's board in January, becoming the first non-employee director named to the board since 2005. (If you were on Google's board, would you want to leave?) Her compensation includes a $75,000 cash retainer, $350,000 worth of Google Stock Units (GSUs), and another $1 million worth of GSUs. No word on whether she's also entitled to free meals in Google's legendary cafeterias.
Sam's Club Membership has its Privileges. Wal-Mart's corporate culture is generally associated with frugality, penny-pinching, and low prices every day. But it is willing to loosen its purse strings when it comes to executive talent. In late January, Wal-Mart promoted Rosalind Brewer, the head of Wal-Mart's U.S. east business unit, to president and chief executive of the company's massive Sam's Clubs division. If it were a stand-alone company, Sam's Clubs would be one of the biggest retailers in the world (with sales of about $48 billion in 2010.) And so Brewer is being compensated accordingly. Her deal includes a (modest) base salary of $800,000, a cash bonus of $1.28-$1.6 million, $3.5 million in stock awards, plus two more performance-based stock awards worth more than $3.64 million. All in, the deal is worth more than $9 million. Membership in Sam's Clubs does indeed have its privileges.
Daniel Gross is economics editor at Yahoo! Finance
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