By JASON BOOTH

Staff Reporter

Michael Eisner has become a poster boy for massive executive payouts. But based on a survey of salary, bonuses and granted stock options in 1998, the Walt Disney Co. chairman and chief executive actually comes relatively cheap.

Eisner's pay package was valued at $5.76 million in 1998 only 0.3 percent of Disney's net profits last year.

"His pay is a very small percentage of Disney's overall business," said Bruce Raabe, an analyst at Collins & Co. in San Francisco. "Disney is a company based on creativity. So you need a special kind of leadership. Eisner seems to have it. Overall, I would say he has been a bargain."

Eisner received a base salary of $764,423 last year, which is moderate by CEO standards. On top of that he received a $5 million bonus.

He did not, however, receive any new options, which has been the source of his great wealth, estimated by the Business Journal at $800 million, making him among the highest-paid corporate executives in U.S. history.

Disney wasn't the only local company whose chief executive's salary last year seemed proportionately low when compared to company income.

John E. Bryson, chief executive of Edison International, made $2.9 million last year. But that was only 0.4 percent of the energy company's net income. Bryson has been a bargain for years; last year he ranked as the most cost-efficient chief executive at an L.A. public company, with pay accounting for 0.37 percent of net income.

Analysts say the lower pay at Edison is party due to the fact that it has been in a regulated industry, so the government, as well as shareholders, are keeping an eye on costs. (This could start changing as much of the utility business is deregulated.)

Other CEOs who earned their pay last year include Amgen Inc. Chairman Gordon Binder, whose $6 million in pay was only 0.7 percent of net income; and Countrywide Credit Industries Chief Executive Angelo Mozilo, whose $5 million payout was 1.3 percent of net income.

In 1997, it was oil companies that had the cheapest executives. But with lower crude prices cutting into profits last year, executives at Atlantic Richfield Co. and Unocal Corp. are not looking like such a bargain.

Arco Chairman Mike Bowlin ranked as the second cheapest corporate chief for 1997, even though he earned more than $8 million. But while his overall pay fell to $6.4 million last year, he now ranks as the least cost-efficient executive on the list. That's because his company lost $657 million amid weak oil prices worldwide.

Linda Wachner, chairwoman of Authentic Fitness Corp., which controls such sporting-goods brand names as Speedo and Oscar de La Renta, also received a substantial portion of company profits. All told, she accounted for 87 percent of net income.

Wachner is no newcomer to the ranks of the highly paid. Her $4.6 million pay package in 1997 accounted for 20 percent of Authentic Fitness' net income that year.

Wachner has recently become a lightning rod in the debate over executive pay in relation to Warnaco Group Inc., a New York-based apparel company of which she is chairman. Wachner received a $6 million bonus in 1998 from the company even though its stock has been an under-performer in that period.

Also looking a tad expensive are managers at EarthLink Network Inc., which has three executives near the top of the pay list even though the company lost $67 million last year.

The company's chief executive, Charles C. Betty, was the second highest-paid executive, with a package worth $23.4 million. But 98 percent of that pay was in the form of stock options, which might take years to mature.

Furthermore, EarthLink executives and compensation experts point out that in the high-tech sector, in which companies are desperate for talent but short on cash, businesses have no choice but to reward employees through generous options packages.

"We are driving toward profitability, and having highly talented executives is the best for us to achieve that quickly," said Michael Ihde, Earthlink's vice president for human resources. "Extensive options packages are the best way to attract those people. Luckily for us, Wall Street understands this."

You don't have to be the chief executive in order to earn a sizable chunk of your company's profits.

Richard Handler, executive vice president and manager of the taxable fixed income division at Jefferies Group Inc., was paid the equivalent of 17 percent of the company's net income last year. That payout is especially dramatic because the majority of his income was derived from a cash bonus, rather than stock options.

Jefferies executives admit that Handler is paid well. But they note that he was instrumental in helping the company post a profit even when the bond market was in turmoil in the second half of 1998.

"He's a unique talent," said Michael Klowden, president of the Jefferies Group. "His pay is calculated strictly as a percentage of the bottom line."

With lower average pay packages, it looks like L.A. companies may be getting more of their money's worth out of their executives. Of all the executives on the list, 27 received payouts equal to less than 1 percent of the firm's net income. That's up from 18 such discount executives a year earlier.

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