Hello Everyone. The Occupy Wall Street Movement is still going strong, but unfortunately it is not really accomplishing anything. Would you like to know exactly what the Occupy Wall Street protestors are upset about? Amongst other things, they are outraged by the multi million dollar bonuses that CEOs are receiving.
The perception of the US versus Canada as a population and as a country is that the US is definitely more flashy. This is a personal opinion and my own perception as a Canadian; so before you blow up this post with comments including statistics and facts please remember that this is just a personal opinion.
Americans are perceived to be more indulgent and to consume more in mass than their Northern neighbours. Over indulgence and over consumption are not necessarily a good thing or a bad thing, it’s just a perception. Money may be one of the aspects where Americans over consume and indulge in more than Canadians.
MSN recently published an article about the monetary difference between the CEOs of major US Corporations and the CEOs of major Canadian Corporations. Let’s see how we compare.
CEO Bonuses of Energy Corporations
Richard George is the CEO of Suncor which is a Canadian Energy Corporation. He received $4.8 million in the form of an annual bonus in addition to his $1.1 million annual salary. John Watson is the CEO of the US Energy Corporation Chevron. In addition to his base salary of $1.47 million he recently received an annual bonus of over $12 million. Rex Tillerson is the CEO of Exxon Mobil. He received a mega $18.9 million in an annual bonus last year on top of his $10.1 million annual salary.
CEO Bonuses in Precious Metals
Aaron Regent is the CEO of the Canadian based Barrick Gold which is the world’s largest gold producer. Aaron Regent is the highest paid Canadian CEO with an annual bonus of $19.3 million and an annual salary of $1.3 million.
Technology CEO Bonuses
The difference between the annual salaries of 3 Technology Giant CEOs in the US is astonishing. It really makes us see who is acting in the best interest of their shareholders and who is pushing their own personal profit agenda. Sam Palmisano is the CEO of IBM and last year he received $25.2 million total compensation from IBM which includes an annual bonus of $22.3 million.
Microsoft CEO Steve Ballmer only received an annual bonus of $670,000 last year and it was his own decision. Steve Ballmer also decided not to receive company stock as a form of his annual compensation. He now receives $670,000 in the form of an annual salary and an additional cash payout of $670,000 in the form of an annual bonus.
Former Apple CEO received only his customary $1 annual bonus from Apple Corporation during his final year as CEO. During the medical illness absence of Steve Jobs the corporations Chief Operating Officer stepped in to fulfill the role and he handsomely rewarded himself. Last year Tim Cook received a total compensation from Apple Corporation of $59.1 million for his role as both CEO and Chief Operating Officer.
This is just some financial information to think about. If you were the CEO of a profitable corporation would you pay yourself an extravagant annual bonus or would you pay your profits out to shareholders?
Photo by Tripp
Kristina Tahnyak
Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.
While CEO compensation is high by whatever measure you use, I think many of us would be more acceptable to it if it was doled out in response to actual performance. If company goes belly-up and the CEO leaves, there’s little justification in my mind for that CEO to get a parting gift. Similarly, if a company is underperforming, the bonus should be tied to that and be smaller if not zero until the company’s financials improve.
P.S. You have a small typo in the first sentence of the third paragraph. I know people hate having typos pointed out, but I can’t help myself :-)
One thing you don’t mention is how much did those companies make? Most people at my company make a bonus off the profit or how much profit they brought in. I would imagine that most US companies make more than Canadian companies for a variety of reasons but one main one being population, so they would pay out more in bonuses. This article doesn’t accurately depict the difference between the US and Canadian companies. If instead this article said US companies pay 20% in bonuses vs Canadian companies that pay 1%, I could see that the US ones are paying way more than the Canadian companies. After a little research, I found that Suncor’s revenues for 2010 were in the millions and Chevron’s were in the billions so that is easy to explain why Chevron’s CEO got paid more. I didn’t look at the other companies but my guess is that they made a lot more more in the US so they gave a lot more in bonuses.
I agree, in an ideal world a CEOs bonus would be directly based on the business performance, but unfortunately this is not always the case. After all…money is the root of all evil (so they say).
I am not at all against CEO compensation, They are rare breed and deserve what they earn. a premium for better brain cells. Yes, I want to be an exception thinking that way.
I like to consider the question in another way as CEO pay cannot be controlled outside the corporate structure: Will politicians allow CEOs to keep their pay packages and tax advantages? If the political winds of change require that executive compensation be trimmed it will come in the form of increased taxes. CEOs probably would be well – served by doing some type of “public relations efforts. Look at Starbucks CEO Howard Schultz. He is hard hitting in commentary on current events and seems to be getting a lot of positive media attention despite that he is well compensated. CEOs may want to take a page from his book.