To look only at the top-paid executives of Los Angeles-based public companies is to dismiss an important reality of the local economy: After waves of corporate mergers, many of L.A.’s biggest players are based elsewhere.
And some of those companies’ chieftains are not as well compensated as the heads of L.A.-based public companies.
The top executive at Seattle-based Boeing Co. which is Los Angeles County’s largest private employer, but based in Seattle only would be the 30th best-compensated executive in L.A. if the aerospace giant were based here.
Boeing Chairman and Chief Executive Philip M. Condit, at a total compensation of $5.6 million, made less than the chairman and CEO of Unova Inc., less than both the chairman and president of Fremont General Corp. and less than the chairman and CEO of Amgen Inc., according to proxy statements.
Boeing President and Chief Operating Officer Harry C. Stonecipher who was president and CEO of major local employer McDonnell Douglas Corp. before its acquisition by Boeing did significantly better.
At more than $13.5 million, Stonecipher would have ranked at No. 9 among local executives if he worked for an L.A.-based company just behind the vice chairman of Countrywide Credit Industries Inc. but ahead of Walt Disney Co. Chairman Michael D. Eisner, Atlantic Richfield Co. Chairman Mike R. Bowlin and Times Mirror Co. Chairman Mark H. Willes.
Of course, Condit and Stonecipher did very well last year, at least when their compensation is based on the company’s performance. After all, Boeing had a net loss of $178 million.
Top executives of Lockheed Martin Corp. another aerospace giant with significant operations in L.A. County did better than Condit, but not as well as Stonecipher.
Lockheed Martin Chairman and Chief Executive Vance D. Coffman had a total compensation of $8.1 million in 1997, which would rank him as the 23rd best-compensated executive if his company were based in L.A.
The top executives of Lockheed and Boeing did much better in 1997 than the highest-paid executive at a locally based aerospace industry company. John M. Leonis, chairman and CEO of second-tier aerospace company Litton Industries Inc., was ranked at No. 62 with almost $2.9 million.
Judith Fischer, managing director of Springfield, Va.-based Executive Compensation Advisor Services, said that a company’s acquisitiveness rarely has any effect on how well-compensated its top executives happen to be.
For example, she said, Microsoft Corp. has acquired numerous companies in recent years, but its top executives although benefiting from their ownership of high-performing company stock have not seen greater compensation from the acquisitions.
“(Chairman) Bill Gates is paid very, very modestly, as are the other top executives” at Microsoft, she said.
Top executives of Seattle-based Washington Mutual Inc. and San Francisco-based Wells Fargo & Co., whose companies have both been buying up local banks in recent years, had similar compensation packages. Kerry K. Killinger, chairman, president and CEO of Washington Mutual, had a total compensation of $7.6 million. Paul Hazen, who holds the same positions at Wells Fargo, had $7.2 million.
The heads of Montreal-based Seagram Co. Ltd., parent company of Universal City-based Universal Studios Inc., also would not be in the top ranks of compensation if Seagram were in L.A. Edgar Bronfman Jr., president and CEO of Seagram, had a total compensation of nearly $4.2 million last year. Edgar Bronfman Sr., chairman of the company, came in at $3.5 million. Both had a far lower 1997 compensation than not only Disney head Eisner, but also Disney Senior Executive Vice President Sanford M. Litvack ($7.2 million).
Frank J. Biondi Jr., chairman and CEO of Universal Studios (who is based in L.A.), did significantly better than his bosses, at $11.1 million.
Martin L. Grass, chairman and CEO of Camp Hill, Pa.-based Rite Aid Corp. which last year took over the Thrifty chain of drugstores (formerly based in L.A.) was at $2.5 million, which would put his L.A. ranking at No. 69, just behind Edison International Chairman John E. Bryson.
