Infonet Services Corp., El SegundoJohn Legere
Asia Global Crossing, Beverly HillsHenry Yuen
Gemstar International Group, PasadenaMichael Eisner
Walt Disney Co., BurbankJill Barad
Mattel Inc., El SegundoCompensation Gets Boost From Options
It could be the last hurrah for executives seeking instant wealth.
L.A.'s 100 best-paid corporate executives saw their total compensation jump 34 percent in 2000 to an average $8.3 million from $6.2 million in 1999, according to Joint Information Inc., a compensation consulting and research firm that compiled the list for the Business Journal.
But reflecting the economic slowdown that began in the second half of last year, base salaries and bonuses both dropped. In a signal that corporate boards weren't entirely pleased with financial performance, the average executive salary fell about 10 percent, to $533,787 from $589,252 in 1999, while the average bonus dropped slightly, to $856,716 from $864,354.
It was in the realm of the now-familiar stock option grants where executives fattened their potential, if not actual, paychecks. The average value of options rose $1.5 million, up 35 percent from the previous year.
"The data is consistent with my expectations," said George Paulin, president of Frederic W. Cook & Co., an executive compensation consultancy in West Los Angeles. "Cash compensation was pretty flat vs. 1999. But on the long-term side, stock options and other equity compensation continues to rise. The grant value of options in 2000 was significantly higher than in the previous year."
But as he and others pointed out, being granted stock options is one thing. Exercising them for a huge return is something else.
In the late 1990s, stock options became the watch-word for instant riches because it was assumed that once a company, especially a technology company, went public, the values of its shares would skyrocket and ensure riches for its executives.
But the IPO goldmine scenario is a thing of the past.
Nowhere is this more evident than for the person topping this year's list. Jose Collazo's total compensation package as chairman, president and chief executive of El Segundo-based Infonet Services Corp. was a whopping $83.9 million. Four other senior officers at Infonet Services made the top 20 as well.
However, the vast majority of the Infonet executives' compensation was in the form of long-term stock options that are unlikely to be vested anytime soon. In Collazo's case, the 5 million options granted carry a potential value of $79.1 million, according to Infonet's proxy statement. That same year, Infonet reported a loss of $27 million.
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