Yesterday, New York Times reporter David Carr summarized the 2012 compensation afforded the folks – all men – leading media companies in the United States. For the chapter-and-verse recitation, you can read his work, but here's the short story:
Consider: the top 20 companies in the United States ranked by market capitalization include no media companies. But according to figures assembled for The New York Times by Equilar, which compiles data on executive compensation, media companies employ seven of the top 20 highest paid chief executives.
Carr understands and accurately describes the impact that incentive plans based on stock price improvements have on total compensation. This is a welcome change from a January article in which he celebrated the 2012 stock performance of many of these same companies.
As I pointed out in a response to his January piece:
… companies that are growing are the ones least likely to return capital to shareholders. They need it to fund their growth. When businesses start to distribute more of their cash to shareholders, they acknowledge “We can’t find any investments that trump just handing this money over to you.”
Well, sometimes they are saying “We’re buying back stock because a higher share price means we all get better bonuses”, but the point is the same. They aren’t investing in the future.
This is a theme Carr picks up in yesterday's article: "For the time being, traditional media business models are prospering and the leaders of the incumbents are fat and happy. But that might make them bigger, slower targets and in the end, easier to overtake." Point taken.