Last year’s $84.5M package made Dauman one of the highest paid CEOs in the U.S. — and a target for a lot of scorn. But much of his bonanza came from one-time stock awards. Without them he’s still a candidate to be one of the most richly compensated media execs in 2011, based on the data in Viacom’s just-filed proxy. For the fiscal year that ended in September, while Viacom stock was up 7.7%, Dauman’s compensation includes: salary of $3.5M (+33% vs last year), annual stock award of $10.2M (flat), $3.1M in one-time stock (-90.1%), $6.0M in annual option award (flat), and $20M in non-equity incentive compensation (+77.8%). His perks included $232,000 for personal use of Viacom’s aircraft, and $15,000 for car service. Dauman’s package accounted for 39.5% of the compensation that Viacom awarded to its top five execs. His lieutenant, COO Tom Dooley, came in second with $34.1M (-47.3% without one-time stock) — equal to 31.2% of the total for the top five. Viacom said that the duo “executed on key operational goals such as strengthening relationships with key partners, increasing the Company’s investment in content as well as cost-effectiveness in our operations, building our international operations and returning capital to our stockholders while maintaining a solid financial position.” Viacom also praised them for achieving ”strong financial results while continuing to navigate economic challenges and positioning the Company well for the future.” Chairman Sumner Redstone, who controls the company, made $21M (+40%). …
EXCLUSIVE: This is exactly the kind of information that shareholders of Big Media need to know but rarely see. It’s considered a red flag when any public company pays one of its bigwigs – usually the CEO – three times more than the average for the four other top executives which the SEC requires them to list. So I’ve taken proxy statements and done the computations and discovered that at least 16 of 35 companies failed that test. Often miserably. Nearly half of the media company compensation packages disclosed so far for 2010 show a startling degree of hero-worship as boards of directors pay their top dogs sums that far exceed what the pay was for other top execs in the company.
Stock grants accounted for big chunks of the compensation for those who top this list, including Discovery Communications CEO David Zaslav, Viacom CEO Philippe Dauman, DirecTV CEO Michael White, Nielsen CEO David Calhoun, and CBS chief Les Moonves. Radio station owner Entercom was off the charts: CEO David Field’s $9.1 million compensation was modest by media company standards but still 25.4 times bigger than average for the company’s other four executives. It includes $7.9 million from stock grants that only pay off if Entercom shares rise to hit certain target prices.
Still, corporate governance experts who focus on what’s often called “CEO centrality” say that an out-of-whack pay package is bad news for shareholders. It indicates that the board of directors may be in the pocket of a CEO – or believes he or she has near super-human power to help the company succeed. In either case, the board is likely to give the CEO all the credit when things go well, and blame others when they go badly. Research shows that usually hurts the stock price over time.
I’ll track this and other measures of lop-sided pay as other media companies release information for 2010. But there are a few things to keep in mind: The SEC reporting rules only cover the top-paid executives of publicly traded U.S. companies. That means we probably won’t know how much privately held Hearst pays CEO Frank Bennack, or how much Japan’s Sony pays CEO Howard Stringer. It also means that we’ll miss a lot of highly paid people who work at subsidiaries of a big company; Universal Studios’ Ron Meyer may be a big deal in Hollywood, but he was a relatively small fish last year at parent company General Electric.
To make comparisons in our list here as fair as possible, we looked at the compensation for the five most highly paid employees for 2010. Sometimes companies report the pay for more than five people — for example, when a top executive is replaced during the year a corporation will include the incoming and outgoing person’s compensation. And the pay data given the SEC can spike in a year when an executive cashes in stock or collects deferred compensation. So here’s how the companies stack up, with the top paid executive’s 2010 reported compensation and comparison to the average (median) pay for the four other highest-paid honchos:
1. Entercom: David Field. The son of company founder Joseph Field became CEO in 2002, about 15 years after leaving his job as an investment banker at Goldman Sachs. Field made $9.1 million last year – the total of his $791,723 salary, $444,308 bonus, $7.9 million in stock, and $28,000 in other perks including medical insurance premiums. That’s a 348% raise in a year when company shares appreciated 53.2%. Though considered a strong operating executive, his salary stands out because it’s 25.4 times higher than the $358,692 average for the four other top executives listed in Entercom’s proxy statement. Field’s salary and the $3.9 million paid to CFO Stephen Fisher accounted for 93% of the $14 million that Entercom paid to its top five executives.
Viacom has been very good to Philippe Dauman. A company proxy statement filed on Friday with the Securities and Exchange Commission revealed that the CEO amassed $84.5 million in stock, salary and other benefits during Viacom’s fiscal year, which ended on Sept. 30. Included in the giant sum is a one-time stock award – $31.7 million – which is dependent on financial goals over the next five years and was part of his new agreement signed in April. The company’s three top executives – Dauman, chairman Sumner Redstone and COO Thomas Dooley – were paid $165 million in stock and other compensation. Dooley received a total of $64.7 million, while Redstone got $15 million. The amounts received were, according the proxy statement, based on performance; Viacom’s stock price rose 22% during the compensation period.
The amount was certainly a huge raise for Dauman, who received $34 million in 2009 – and it will be interesting to see how all media moguls fare as their compensation is reported for a much-improved (financially-speaking) 2010. In 2009, the top media mogul paydays included Les Moonves ($43 million), Comcast’s Brian Roberts ($25 million), News Corp’s Rupert Murdoch ($18 million), Disney’s Bob Iger ($21 million) and Time Warner’s Jeff Bewkes ($19.4 million)