Typically, a public company has a compensation committee within the board of directors that helps determine how much money the top level of executives makes. Employment contracts with execs establish the parameters. The compensation committee decides from there.
While salaries are most often determined by the level of someone's experience and the demand for his or her skills, bonuses are normally performance-based. Joe Blow's contract says he can make up to 150 percent of his annual salary in a bonus based on how well the company does this year under his control.
It stands to reason, then, that most chief executives' compensation would mimic company performance. With the list of integrators on Washington Technology's TechTicker, that thinking generally holds true.
Darwin Deason, chairman and chief executive of Affiliated Computer Services, saw his salary and bonus increase 30 percent last year to $1.6 million. Not only did the company increase its revenue to $625 million from $397 million the previous year, but Deason also helped orchestrate the successful acquisition of Computer Data Systems Inc. at the end of the year.
Van Honeycutt, chairman, CEO and president of Computer Sciences Corp., took home $1.4 million last year, more than double his pay of $625,000 in 1996. CSC nearly doubled its income last year to $192 million, while revenue jumped from $4.7 billion in 1996 to $5.6 billion.
Louis Gerstner, chairman and CEO of IBM Corp., made $6 million last year - $1.3 million more than 1996. IBM increased revenue to $79 billion last year from $76 billion in 1996. The company's net income rose from $5.4 billion to $6.1 billion.
However, several executives' pay ran counter to company performance last year.
While Vanstar Corp. increased revenue 22 percent to $2.2 billion and income 76 percent to $30 million, its top executive did not fare as well. William Tauscher, chairman and CEO, made $579,000 last year - about one-half his income in 1996.
John Keane, president and CEO of Keane Inc., boosted his salary 7 percent last year. However, the company's revenue fell from $467 million to $383 million, and income dropped from $25 million to $19 million.
Lester Alberthal, chief executive at Electronic Data Systems, made one-half of his 1996 salary of $1.7 million last year. But EDS had healthy increases in both income and revenue.
There are also a few compensation quirks of note from the integrators list.
Joseph Tucci, chairman and CEO of Wang Laboratories, received a $4 million "retention bonus" last year, bringing his total pay package to $5.8 million. By comparison, Wang only netted $56 million last year.
Unisys paid chief executive Lawrence Weinbach $3.1 million last year, although Weinbach only signed on with the company as its top officer at the end of the third quarter. His compensation plan included a one-time bonus and relocation expenses.
Raymond Smith, chairman and CEO of Bell Atlantic Corp., scored a $4 million bonus last year for completing the company's acquisition of Nynex. That bonus took his compensation to $6.5 million for the year, the largest pay package of any executive on the integrator list.
For questions, comments and suggestions, contact Bob Starzynski on the Internet at firstname.lastname@example.org.