$0 salary, millions in stock deals

Charlie Ergen earned $1 in salary last
year as the top executive at Echo star Corp., a distributor of digital
television equipment.

But don't feel sorry for him. Ergen's total compensation was $829,124, and he made $2.7 million at Dish Network, the related satellite-television provider.

Believe it or not, Terry Considine at Apartment Investment & Management and Robert McEwen, CEO and chairman of US Gold, make even less in salary.

Considine receives his salary in stock options rather than cash and had total compensation of $4.8 million.

As for McEwen, he took no compensation of any kind. But he also owns or controls about a third of the company's stock.

"Due to this investment, we believed that he was sufficiently
motivated to further the interests of the shareholders," the company
noted in its proxy. This year, he should get options to purchase 1
million shares.

Corporate compensation committees are supposed to structure
pay packages so they retain executives and motivate performance but
don't give away the store.

Executive pay practices can vary widely, even within the same industry.

At Delta Petroleum, 82 percent of executive compensation last
year was tied to long-term stock and option awards, and only 15 percent
was linked to cash sources such as salaries, bonuses and incentive
plans.

At Whiting Petroleum, the situation was reverse. Only 4
percent of pay came in the form of stocks and options, while 95 percent
was linked to cash sources and nonequity incentive plans.

Last year, the 50 largest Colorado
companies paid just over half, 52 percent, of compensation in stock
awards and options grants, 38 percent in salary, bonus and nonstock
incentives. About 8 percent came in the form of perks and other pay.
And 2 percent represented gains in the value of pension benefits.

Bill King, director of the compensation benefits practice at Grant Thornton in Houston, said pay is moving increasingly toward restricted shares and away from cash payouts and stock options grants.

Restricted shares...

 

For more information on $0 slary, millions on equity compensation.

Posted by Dan Walter

Performensation: Equity Compensation for High Performance Companies.