Warning: Nasty “class warfare” rant ahead.

Posted by admin
May 22 2006

It may have been good to be king, as the old-time historians would tell me, but it seems pretty darn nifty to be a CEO in Minnesota.

Median pay for state’s top 100 CEOs rose 59 percent (Minneapolis Star-Tribune):

Minnesota CEOs still make less than their peers nationwide. But they’re catching up — fast.

Median pay for the 100 highest-paid CEOs in the state jumped 59.3 percent in 2005, to $1.79 million, far above the 15.8 percent gain in April’s national survey of 350 CEOs conducted by the Wall Street Journal and Mercer Human Resource Consulting. The Minnesota figures, compiled by the Star Tribune based on securities filings made this year, include salary, bonus and long-term compensation.

The median total CEO pay package in the Journal’s national sample is $6 million compared with $1.79 million in Minnesota, but Minnesota is gaining both in percentage terms and number of corporate heads pulling down seven figures or more. In 1999, at the peak of the tech bubble, 46 Minnesota CEOs were paid $1 million or more per year. As of last year, the figure was 66. Stock-option gains accounted for the biggest part of total compensation for the 100 Minnesota CEOs — 46 percent — which translated into $202.5 million worth of shares split among 43 company heads in 2005.

Tougher regulatory scrutiny and tax-law changes are making stock options less attractive. That was driven home this month when UnitedHealth Group CEO William McGuire, who earlier this year held unexercised options worth $1.6 billion, suddenly swore them off.

But the waning interest in options doesn’t mean CEOs are about to take pay cuts. Instead, many companies have turned to a simpler yet still lucrative way of rewarding their top brass: restricted stock. The dollar value of restricted stock granted to Minnesota’s 100 highest-paid executives jumped from $18.1 million in 2003 to $70 million in 2005, a 280 percent jump, according to a Star Tribune review of Securities and Exchange Commission documents. Thirty-nine Minnesota CEOs got restricted stock last year, up from 26 in 2004.

I hope they get to enjoy that new Twins Stadium with the spiffy sky boxes we residents of Hennepin county will be buying them.

(Okay, this wasn’t much of a rant, but… jeez-looeez! …a 60% increase in income?)

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