Despite shaky economy and poor stock performance media chief executives enjoyed healthy raises
(Updated, 3:30 p.m. EST Friday)
The economy was shaky, the home-entertainment industry was in turmoil and Occupy Wall Street was at full boil, but the top media and technology executives still rewarded themselves with fat salaries, bonuses and stock options in 2011, TheWrap's fourth annual executive compensation survey shows.
An investigation into public filings reveals:
>> Walt Disney Chairman Bob Iger's annual package shot up 12 percent in 2011, while the company's share price stagnated.
>> Rupert Murdoch at News Corp. took a $12.5-million bonus, despite a parade of horrible news from his U.K. media properties.
>> Sumner Redstone bagged a $5 million raise while Viacom shares remained dead flat at $47.
>> CBS CEO Les Moonves took the top compensation prize among entertainment chiefs, $69.9 million for overseeing America's most-watched network.
The rare contrite chief executive included Netflix CEO Reed Hastings, who enjoyed a 70 percent raise in 2011, but announced that he would take a multi-million pay cut next year after a series of strategic blunders and subscriber defections led to a drop in share price, from $248 to $104.
(Editor's Note: Several companies released their compensation figures after the charts were published.)
How does this happen?
Iger, for example, took less pay when the recession hit a low point, but he has seen his compensation increase steadily over the past two years, thanks to increased revenues.
With a succession plan now firmly in place that will see Iger remain at Disney as the company’s chairman through 2016, the entertainment baron’s compensation shot up in 2011 to $31.4 million. Some $13 million of that comes in performance-based stock awards and options that vest over several years, but it's still a hefty payday.
Nor is Iger the only richly compensated member of the uber-1 percent. While Viacom CEO Philippe Dauman halved his compensation package in 2011 from $84.5 million, he still earned $43.1 million in salary and stock options. His compensation reached such rarefied heights in 2010 due largely to a stock equity award of $54.27 million which will vest over a five-year period if the company hits certain benchmarks.
And Moonves, who overtook Dauman as Hollywood’s highest-paid CEO last year, owes some of his own eye-popping compensation to a $27.5-million bonus he received for hitting performance goals.
Moonves’ pay next year is also structured to reward him for reaching specific milestones, so he may be looking forward to another big piece of pie.
None of that matches the little envelope newly minted Apple CEO Tim Cook took home. Cook earned $377.9 million in compensation last year after taking over the technology company from the late Steve Jobs.
Of course, $376 million of that came in restricted stock that will vest over a 10-year period, with Cook’s salary topping out at roughly $900,000. Still, that's a pretty high mark-up from the $1 salary Jobs commanded.
To be fair, Apple had a pretty fine year and saw fit to share the wealth with investors recently with its first dividend in nearly a decade. But compare that to Rupert Murdoch, whose pay package increased nearly 47 percent to $33.3 million in 2011 — a year that saw News Corp. embroiled in a phone-hacking scandal that resulted in a parliamentary investigation in the U.K., a botched attempt at buying full-ownership of BSkyB and a badly damaged reputation.
Needless to say there was lots of bad blood at last year's annual shareholder's meeting.
Some public companies have yet to file proxy statements detailing the pay packages of their top executives, so it's not clear how the executives of Comcast and Google fared, for example. However, based on a preliminary survey of the major entertainment and media fiefdoms, it still pays to wear the crown.
To be sure, there were a few executives who backed away from the trough. Time Warner had a strong year, posting earnings of $2.9 billion and an 8 percent jump in revenue to $29 billion, thanks in no small part to the box-office success of the final “Harry Potter” film and its thriving TV unit. Yet Chairman and CEO Jeff Bewkes kept his compensation package more or less unchanged at $25.9 million.
Over at DreamWorks Animation, CEO Jeffrey Katzenberg's package dropped 40 percent to $4 million. That kind of wallet-lightening may have been necessary in a year that saw DWA’s revenue and earnings fall 10 percent and 48 percent respectively as the company struggled to withstand the overall decline in the DVD market and tighter competition in the family film space.
Then there’s Netflix's Hastings. His total compensation nearly doubled to $9.3 million last year, though the founder of the red envelope company announced in public filings that he will take a $1.5 million pay cut in 2012. Investors aren’t weeping.
Under Hastings, Netflix clumsily introduced a price hike to its most popular subscription package and after facing customer defections was forced to abandon a plan to spin-off its DVD-by-mail business into a separate company called Qwikster. No longer the belle of the NASDAQ, Netflix has seen its shares plunge from roughly $300 in July to approximately $100 today.
Though Apple's Cook may have turned heads with his 2011 pay package, Silicon Valley doesn't reward its top executives with the same kind of money routinely doled out in Hollywood, preferring to give them a larger stake in the company instead.
Take Amazon founder and CEO Jeff Bezos. The internet innovator's total compensation may have topped $1.6 million in 2011, but his annual salary remained a lowly $81,840 for the third straight year. The rest of the package is largely ascribed to expenses relating to security and corporate travel.
Of course, Bezos owns about 20 percent of the online retailer’s outstanding shares, a stake worth north of $16.6 billion.
With that kind of nest egg, it’s easy to be thrifty.
Diane Garrett contributed to this report.