Maybe you sensed CEO pay was soaring. Well, the numbers are in, and they will blow you away.

Total pay the combined value of salary, bonus, stock options and other compensation granted in 1999 jumped 20.9 percent for the median CEO among 347 major U.S. companies that had the same chief executive in 1999 as 1998, according to a study I recently performed.

And what did these bosses deliver to earn such a boost? A median total return on their stock of 4.7 percent.

In every category of pay, executives are enriching themselves faster than their shareholders, according to the survey. Five CEOs earned more than $100 million in 1999, led by Charles Wang of Computer Associates International Inc., whose pay of $655.4 million was so staggering it led to a shareholder lawsuit and a court ruling that he give almost half of it back.

At the other end of the pay spectrum was Apple Computer Inc.'s Steve Jobs, who earned precisely $1 in 1999.

Options explode

By far the biggest increases in CEO pay came from stock options. Encouraged by an accounting system that doesn't require them to expense any cost for options except in unusual cases, U.S. companies are passing out stock options hand over fist.

I examined the proxy statements of 439 companies that ranked among the 1,000 largest companies in the United States by market cap near the end of 1999. The survey examined only CEOs and included proxies filed between May 1, 1999, and March 24, 2000. The combined pay of all the CEOs surveyed was $4.55 billion.

The median CEO in the group earned $4.4 million in total pay in 1999. But the average pay of the group was $10.4 million. Why the disparity? Because the average was skewed by the biggest gainers. There's no way a CEO can earn negative pay, but the sky's the limit on the high end.

At the top of the pay scale were Wang and four other CEOs whose total pay exceeded $100 million by my estimates, thanks to huge option grants: Tyco International Ltd.'s L. Dennis Kozlowski ($157 million), Global Crossing Ltd.'s Robert Annunziata ($141 million), Qwest Communications International Inc.'s Joseph P. Nacchio ($136 million) and Citigroup Inc.'s Sanford I. Weill ($117 million).

At the bottom was Apple's Jobs. Before you rush out to beatify the personal computer pioneer as a pay saint, note that in January he accepted the largest option grant in the history of man 10 million shares at one sitting. That option, which had an estimated present value when it was granted of a whopping $471 million, will put him at or near the top of the pay list in next year's survey. He also accepted his board's gift of a personal jet and the money to pay the taxes on the jet, a package worth $90 million.


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