The economic rebound last year helped the big bosses of Silicon Valley achieve their performance targets earning for the CEOs hefty paycheck bumps for 2010 after experiencing two years of pay declines no thanks to the recession.
Median compensation increased by 37 percent for the chiefs of biggest public companies in Silicon Valley to almost $2,756,621 in 2010. This was remarkable considering the almost five percent decline in 2009 and nearly six percent in 2009.
The annual What the Boss Makes survey by the Mercury News however showed that not everyone got a raise. The Valley’s 2010 and past three years’ reigning pay champ is still Larry Ellison, chief of Oracle(ORCL). His total pay last year was valued at $70 million even if he took a 17 percent pay cut.
However, almost two thirds of the corporate CEOs of the Valley got some extra in their pay envelopes last year from Shantanu Narayenj of Adobe to Doug Bergeron of VeriFone.
Analysts say the increase in compensation is a reflection not only of the economic recovery but also of the growing inclination to link the company’s performance with the executive pay. The goals which determined the bonuses were set a year earlier when there were lower expectations since the recession was still in full swing.
The biggest percentage increase last year of 566 percent went to Sanmina-SCI electronics manufacturer CEO Jure Sola. While he took a pay cut in 2009 when his company underperformed, his income grew from $1.1 million in 2009 to $7.45 million last year which already included a $1.4 million bonus plus stock options. What did he have to achieve? A $5.4 billion revenue for Sanmina in 2010 which in actuality became $6.3 billion.
“They’re setting targets based on the results of the previous year,” said David Eaton, an executive pay expert at the Glass, Lewis shareholder advisory firm. As the economy bounced back, he added, the targets for 2010 were “not that hard to hit.”
“That probably won’t be the case in 2011,” added Shekhar Purohit, compensation consulting firm Pearl Meyer managing director.