Each year, any number of media organizations and shareholder groups publish lists of America's highest paid CEOs. And each year, even before those lists come out, boards of directors at those companies start the spin, aiming to do preemptive damage control by attempting to justify those enormous compensation packages to their shareholders.
Investors often are skeptical of these defenses, and they should be. It's rare -- though not impossible -- to show that a chief executive really deserves $50 million or more for his efforts.
24/7 Wall St. wanted to know: Which of the CEOs bringing home those top pay packages were worth the investment?
We used the annual CEO Pay Survey 2011 from independent research firm GMI to identify the 10 highest paid CEOs of fiscal 2010, then analyzed their companies' performance to determine which ones gave the most value for their millions.
Any such review is, of course, subjective by nature, and our independent analysis will be different from a board's reasoning. Corporate boards may take into account the long-term record of a CEO, or devise a pay package based on an extraordinary year. Directors also may give a CEO a big bump just before he or she retires. Our analysis downplayed each of these factors, but didn't eliminate them.
Instead, we judged the "fairness" of a pay package based primarily on how shareholders fared during the CEO's compensation year. Our primary measurements were revenue growth, earnings growth and stock price change.
Here's 24/7 Wall St.'s list of the 10 highest paid CEOs for fiscal 2010, and our analysis of whether they were worth the money to their shareholders.
Note: All compensation considerations used to set pay, which include board of director criteria from each company, come from SEC-filed proxies.