May 25, 2011
By Len Boselovic
Mylan chairman and CEO Robert J. Coury was the region's highest-compensated executive last year, receiving pay of $22.9 million.
The generic drug company executive ousted William R. Johnson, H.J. Heinz's chairman, president and CEO and the two-time defending champion of the Post-Gazette's Fortunate 50. Mr. Johnson finished third, with fiscal 2010 pay of $19 million, behind Mr. Coury and Consol Energy CEO J. Brett Harvey, whose compensation totaled $20.2 million.
Average compensation of a Fortunate 50 executive last year was $6.5 million, up 11 percent from the previous year. The lowest-paid Fortunate 50 member -- Consol's P. Jerome Richey ($3.1 million) -- made 28 percent more than last year's No. 50, Stephen A. Van Oss of Wesco International. . .
. . .there is a flaw in equity-based pay, according to Mel Fugate of Southern Methodist University's Cox School of Business.
Mr. Fugate said that while shareholders have to put their own money at risk by buying stock in order to profit from rising stock prices, executives do not. Nothing comes out of their pockets, and even when shares of their company do not do well, the shares are still worth something to executives, he said.
"Where we have downside risk, they don't. I think that is a fundamental and often overlooked fact," Mr. Fugate said.
Among the 20 companies represented on the Fortunate 50: two (Consol and Matthews International) generated negative returns, including dividends, for shareholders last year. Over the longer haul, 11 produced negative returns over three fiscal years and three (Matthews, Black Box and Federated Investors) generated negative returns over the last five fiscal years.
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