Amgen's Kevin Sharer emerges as the poster child for overpaid CEOs in a new report from The Washington Post on soaring executive pay.
Sharer had already joined the ranks of top-paid executives with his $15 million annual salary and cushy perks that include a pair of corporate jets to speed him around the globe. But the board overlooked such items as a shrinking stock value when it authorized a 37% hike in pay, giving him $21 million in salary.
The new math in CEO pay, explains the Post, has a lot to do with what's called "peer benchmarking." The Amgen ($AMGN) board opted to boost his pay to the 75th percentile among his peers, saying an above-average CEO deserves above-average income. And it's that kind of figuring that is driving some corporate activists into a frenzy. After all, if everyone drives up salaries to beat the median average established for peers, then you have a steadily rising target to hit. And it has nothing at all to do with, say, actual performance.
"Peer benchmarking has a significant influence on CEO pay," Texas Christian University's John Bizjak tells the Post. "Basically, you can't have every CEO paid above average without pay ratcheting upward over time."
- here's the story from The Washington Post
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