Top Dollar

Raking in more than a million

Like the four-minute mile for runners, an annual income of more than $1 million for a U.S. corporate executive once appeared to be a barrier that would be nearly impossible to break. Now, with the economic recovery in full swing, a combined salary and bonus in excess of $1 million is becoming almost commonplace.

Sibson, a New Jersey-based consulting firm that monitors executive compensation, reports that the highest paid U.S. executive last year appears to have been Donald B. Marron, chairman of the Paine Webber brokerage firm, who received a 1983 salary and bonus totaling $2,012,788. Company financial statements for last year are still being published, and a higher income may yet be reported. Ten other executives from publicly owned Wall Street firms also received total compensation of more than $1 million. Four of them came from First Boston, an investment banking firm.

Executive salaries in Detroit are spiraling upward particularly fast. From 1980 to 1982 the depressed auto industry did not give out any bonuses, but now they are back—and big. Two weeks ago Ford announced that Chairman Philip Caldwell in 1983 received a salary of $520,534 and a bonus of $900,000. Stock options can dramatically boost total compensation figures even higher. Last year Caldwell's options netted him an extra $5,892,024. General Motors Chairman Roger Smith, whose company had record earnings of $3.7 billion in 1983, will probably get a salary and bonus package worth about $1.3 million. Chrysler Chairman Lee lacocca, however, may not get much more than his 1982 compensation of $365,676. Reason: the Chrysler board has already given him a special stock package worth $5 million to $20 million, depending on how long he stays with the company.

If top executives liked their paychecks in 1983, they should be even happier this year. Sibson estimates that the average increase in total compensation for chief executive officers will be 12.5% in 1984, in contrast with an average increase of just 3% last year. Lower-level managers, on the other hand, will not do quite so well. Their pay hikes are expected to be 11%, after a 5.6% increase in 1983. Says Alan Johnson, a senior consultant with Sibson: "The highest increases will be in industries geared to performance, where the bonus reflects the largest part of compensation." Stockbrokers and automakers should do well; executives at utilities and insurance companies may see more modest gains.