Founding a profitable company has long been a path to immense wealth for many of the Wealthiest Angelenos, with serial entrepreneurs Alfred Mann and Eli Broad prime examples.
Now, though, just being a hired gun may be enough to vault a person into the ranks of the wealthiest in these days of inflated CEO compensation.
Consider Ray Irani.
The chairman and chief executive of Occidental Petroleum had one of the biggest paydays in the U.S. business world last year. On top of $55.6 million in salary, bonuses and deferred compensation, Irani also saw $270 million in profit from cashed out stock options, plus another $93 million from a deferred stock plan the company was ending.
Including other compensation, it amounted to a $460 million payout for Irani, who since 1990 has led the company founded by Armand Hammer. That wasn't enough to place the chief executive on the Business Journal's list, but another payday like that should do the trick.
Of course, it's not as if the Business Journal's list has been devoid of CEO-derived wealth. Former Walt Disney Co. Chief Executive Michael Eisner ran the entertainment giant for 20 years before retiring in 2005, and was No. 49 this year with an estimated net worth of $790 million.
Then again, Eisner was a poster child for overcompensated executives ever since regulatory filings showed he had made $570 million in 1998 from stock option exercises. And the huge payout turned out to be a public relations liability during his battle with Disney Director Roy Disney, who was ultimately successful in ousting Eisner from his post in 2005.
Another highly paid executive who might have been on track to eventually make the Business Journal list was Bruce Karatz, the former chairman and chief executive of KB Home who raked in $156 million last year, mostly from exercising stock options.
Karatz, who ranked second after Irani in the Business Journal's survey of 2005 executive compensation, retired in November after an internal investigation found he had backdated stock option grants to maximize his gains.
The growing shareholder furor over excessive compensation also has led Angelo Mozilo, the chairman and chief executive at Countrywide Financial Corp. to cut his base pay by 35 percent from $2.9 million last year.
But Mozilo continues to periodically cash out his options through his prearranged 10b5-1 trading plan, last week netting almost $1.4 million from exercising and selling 46,000 options. His total compensation last year from the nation's leading mortgage lender was more than $120 million and could have been higher if not for the slowing housing market.
But unlike Eisner, Irani and Karatz, Mozillo was a co-founder of Countrywide in the 1960s, serving as chief executive since 1998.
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