Microsoft, Exxon
Satya Nadella, who became CEO of Microsoft Corp. in February 2014, ranks as the second best deal for investors. The $43.5 million that the world’s biggest software maker awarded him last year is equal to 0.4 percent of its $12.1 billion economic profit.
Tony Imperati, a spokesman for Microsoft, disputes Bloomberg’s valuation. The computer maker considers a $13.5 million one-time retention stock grant to Nadella as an award that should be annualized. The index doesn’t annualize one time sign-on and retention awards because they’re not part of companies’ regular performance compensation plans.
Exxon Mobil Corp.’s Rex Tillerson is the third-best deal for investors and Coca-Cola Co.’s Muhtar Kent ranks fourth. Tillerson’s $32.3 million pay is 0.7 percent of his company’s $4.8 billion three-year average economic profit.
Coca-Cola’s pay practices became the target of an investor campaign that drew comment from Warren Buffett last April. The company put in place new guidelines for issuing equity to executives in October, which the world’s third-richest man later praised. The soda maker awarded CEO Kent $33.8 million in 2014, or 1.2 percent of its $2.8 billion economic profit.
Retention Compensation
Qualcomm Inc., the world’s largest maker of chips used in mobile phones, granted CEO Steven Mollenkopf $37.1 million. The pay was part of a series of “aggressive retention-related compensation actions for key talent” after competitors tried to recruit members of its management, the company said in its proxy statement. His pay is equal to 1.7 percent of Qualcomm’s $2.1 billion three-year average economic profit.
Larry Ellison, the billionaire founder of Oracle Corp. who was paid more than $100 million last year, ranks 6th. His pay is equal to 2.1 percent of the software maker’s $4.8 billion economic profit.
Thirty-six of the CEOs in the ranking lead companies that had negative three-year average economic profit, meaning their companies aren’t producing enough profit to cover their cost of capital.