Quick Hits: Are CEOs Worth the Paycheck?
Brief scrutiny of today's headlines
MGIC Investment (MTG) CEO Curt Culver is presiding over some hard times of his own. The company's stock soared to almost $70 per share last year; today it sells for just above $10. But Culver had no qualms about taking home over $6.3 million last year, including $5 million in stock and options. The payday hardly seems commensurate with a 64% plunge in the company's stock price (talk about selling at the top).
Brandywine Realty Trust (BDN) President and CEO Gerald Sweeney bucked the trend, declining a bonus for 2007 and a salary hike for 2008. He did accept a long-term incentive award valued at $1.4 million. Then again, his company's shares are only off last year's peak by 50%.
CEOs get paid big bucks to handle big responsibilities. As with all employees, they shouldn't be rewarded if they fail at their charge, especially if those misses lead to financial losses for thousands of shareholders. Incentive-pay should reward long term and sustainable growth, not blind risk-taking in the interest of the next quarter's bottom line.
For more on CEOs, check out Hoofy and Boo's always astute analysis:
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