At Carnival, the most perks went to the executive who presided over the cruise companys Italian line when the January 2012 Costa Concordia shipwreck killed 32 passengers. Pier Luigi Foschi, formerly CEO of the Costa division and now head of Carnivals Asian arm, received $186,000 toward living accommodations, nearly $100,000 for a driver and security, and $56,000 for a Honorarium fee to Knights of Labor in Italy. A Carnival spokeswoman said Foschis perks are typical for an executive in Italy.
Long a lightning rod for consumer and investor ire, CEO compensation gained even more attention during the market crash of 2008 and the recession that still has wages stagnant and housing values a fraction of what they were before the downturn. Meanwhile, executive compensation seems to have rebounded nicely.
Nationally, according to The Hay Groups annual survey, the average CEO pay stands at about $10 million, roughly 13 percent higher than it was in 2007 (which is roughly equal to the rise of inflation in the same time period). Of the five best-paid CEOS on the 2012 list for South Florida, none are making less than they were in 2007. On average, their pay is up $5 million since before the recession began, an 18 percent increase.
In the same time period, between 2007 and the start of 2013, the Dow Jones Industrial Average ended up about 5 percent.
Compensation advisors, including GGA, get paid to present in-depth recommendations of what a company should be paying a CEO. Often, one company will use another CEOs hefty salary to justify increasing the pay for their own saying they must match industry benchmarks in order to remain competitive.
Everyones pay is based on what everyone else is making, said Charles Elson, a finance professor at the University of Delaware who studies corporate governance. That creates a ratcheting-up effect.
But defenders of hefty CEO pay point out that a successful chief executive can deliver exponentially more for shareholders than what he or she is taking out of the companys profit stream.
For Lennars Miller, in the year he took home a $13 million compensation package, the companys stock price doubled and added about $3.7 billion in the companys market value.
Basically, you distributed $4 billion to shareholders, said Navas, of GGA. You might say $13 million for a CEO is a good deal.
At HEICO, the CEOs pay mostly aligned with shareholder returns in 2012 both trailed the pack in South Florida. The family-controlled company still paid CEO Laurans Mendelson $3.5 million, and his son and top HEICO executive said focusing on a short-term measure like a years stock gains misses the long-range value talented CEOs bring to a company.
I dont believe management or a board should be watching a companys stock, said Victor Mendelson, a HEICOs co-president who as a college student in the 1980s, first spied HEICO as a potential takeover target for his father. He noted that HEICO was worth about $20 million when the family took it over 30 years ago, and now its worth almost $2 billion.
A years share-holder return, Mendelson said, is a short-term metric on a very long-term plan.
South Floridas compensation information highlights both the rarefied income strata occupied by the regions top CEOs, and how small of a footprint South Florida occupies when it comes to Wall Street. Miller makes far more than the $1.2 million listed as Donna Shalalas 2011 compensation as president of the University of Miami, one of Miami-Dades largest employers. The countys largest private employer, Baptist Health, lists CEO Brian Keeleys compensation at about $2.4 million, according to public tax returns filed by the non-profit.