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NEW YORK - Dell, Eli Lilly and Ford Motor are among the 12 worst offenders of so-called "pay for failure" for their chief executives, a study released yesterday has found.
Chief executives at these companies have all received total pay of more than US$15 million ($20.3 million) over the last two fiscal years, according to governance research firm the Corporate Library.
At the same time, the report said, the companies' total shareholder returns have fallen over the last five years and performance against peers slumped over the same period.
"It continues to be the case that far too much executive compensation is delivered without any link to performance at all," said the report, written by Corporate Library senior research associate Paul Hodgson.
The list includes five companies targeted by the research group in a similar study last year: Home Depot, Pfizer, Time Warner, Verizon Communications and Wal-Mart Stores.
New to this year's list were Dell, Eli Lilly, Affiliated Computer Services, Ford, Abbott Laboratories, Qwest Communications International and Wyeth.
At Verizon, chairman and CEO Ivan Seidenberg was awarded US$32.5 million in total compensation over the last two fiscal years, while total shareholder return declined 5 per cent over the past five years, according to the Corporate Library.
A Verizon spokesman said he had not seen the report, but the company's compensation programmes were benchmarked against its peers. He said Verizon's stock had risen steadily over the past 16 months, with a 34.6 per cent total shareholder return in 2006, ranking eighth among 33 peers.
Verizon spokesman Peter Thonis said he did not believe the Corporate Library was using accurate figures, saying the 5-year total shareholder return during that period was up 0.9 per cent.
Hodgson said the figure was based on two sources of data and reflected the change in stock price plus dividends reinvested during the 5-year span.
- REUTERS
