Dracma

Forbes ranking of CEO compensation for America's 500 largest corporations.
UPS CEO ranks 444
FDX CEO ranks 16 (check out the dollar amount of stock owned)

CEO Compensation - Forbes.com

JustUnderPar

Big difference in someone that started a company and someone that chopped through the company ladder.

Fred is the kind of man you want running a company that you own stock in

Jetjok

The thing I find so interesting is that here in the US, our corporate definition of "long term" or "long range", relative to planning, is "through next Thursday", whereas in many other countries, most notably, Japan, their "long term" is just that... Looooong. With that in mind, we seem to accept that our CEO's and senior management of companies, are entitled to as much compensation as they can ring out of the board of directors, who, themselves are members of that very same elite club. In Japan, CEO's of major corporations usually earn some multiplier of their lowest paid employee, and it's not a lot of Yen. I believe most Japanese CEO's earn less than 3 million dollars.

All that said, regardless of what Fred Smith earns, he's the right guy to be running FedEx, and as long as he can provide the appropriate leadership and vision, in my mind anyway, he's worth every penny he gets.

JJ

MaydayMark

You know, I'm OK the idea of Fred making the big bucks.. To be honest, I believe he sort of deserves it. This whole idea was his "baby." It worked, he risked a substantial portion of his personal wealth on the start up operation ... good for him.

My issue is the company arbitrarily lowering MY pay (i.e. 4.a.2.b) in violation of our contract. We've taken a 20-25% pay cut (80 hr guarantee down to 60 on many jets).

Although I can manage on less pay (I'm still married to the first wife, still in my f/o house, drive old cars), it's the principal of the issue

DLax85

A recent article in USA Today...

Kyocera founder Kazuo Inamori criticizes U.S. CEO excesses - USATODAY.com

More specifically, see Inamori's thoughts on high CEO compenstation in the second to last question of the interview:

Q: Sounds like you are a critic of high CEO compensation. Doesn't their pay reflect free-market forces?

A: A lot of Americans use that rationale. But there are only a handful of exceptional athletes who attract tens of thousands of fans, thus creating enormous revenue for the team. A star player who possesses that rare talent should receive an appropriately higher salary. It is the same for an actor who stars in a blockbuster film. It is different for the CEO of a company. Profits are created by the hard work and collaboration of the workers and other levels of management. For the top echelon to receive such high compensation, as if they alone were responsible for the profits, is unreasonable. We should possess the consideration and humility to provide all employees who work for the company with an appropriate share of the gains. That is lacking in today's capitalism or free-market economy, and its absence is responsible for the growing disparity, discrimination and injustice in society.

fr8av8r

Great answer!! I do not begrudge our CEO or the senior executives their pay or bonuses, but they seem oblivious to the fact their great ideas need someone (clerks, hubbites, mechs, pilots, couriers, etc.) to implement them to turn them into a great service that people will buy.

Spongebob

Not saying they shouldn't use some discretion (and the good ones do) but I propose that a CEO is every bit as important to a "team" as the star athlete or actor - and both have HUGE support teams to pull their performance off.

Look at Herb Keller (good) @ SWA and Bob Nardelli (bad) @ Home Depot for examples of how a CEO affects the whole organization.

Spongebob

Daniel Larusso

While I understand your point about the effects, for the purposes of what that Kyocera CEO was discussing, it doesn't seem useful imo to compare a founding CEO with someone brought in by the board. It would seem more pertinent to compare various non-founding CEO's performance and compensation.

DLax85

...and how was Nardelli compensated on departure for his bad performance.

That guy is the poster child for CEO Excessive Compensation!

http://www.washingtonpost.com/wp-dyn...010300553.html

The purpose of corporations is to increase shareholder wealth.

The stock went nowhere during his tenure and he walks with a $210M exit package ---- simply incredible!!

Spongebob

He also almost singlehandedly killed the company....which the Wash Post article totally missed. While contractor revenue increased, they got killed in market share by Lowes and lost almost all of their core, the do-it-yourself remodeling market. With Bob's concentration on the contractor sector, had he stayed, HD would be out of business when that market collapsed. In some ways you could argue that $210 million to get rid of him saved the company. Note he's doing just as well at Chrysler.

A couple weeks ago the HD founders were on CNBC and said that Bob "never got retail" and that the board brought him in because he had lived under Jack Welch's aura at GE..however, he never got "real" responsibility at GE. Interesting.

But..I digress and his compensation wasn't the point of my comment...my point was the influence that a CEO can personnally have on a large company that depends on the efforts of the workers to generate it's revenue. If the leadership is bad, the company will suck too. Look at United.

Spongebob