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Network World - As companies rode out the recession and slowly regained some sales momentum last year, profits started improving and stock prices began to recover. For CEOs that could only mean one thing: pay raises.
CEO compensation rebounded in 2010, according to professional services firm Towers Watson. Median cash compensation -- which includes base salary and bonuses -- increased 17% for CEOs in 2010. Total direct compensation -- which includes cash compensation plus long-term incentives and equity awards -- increased 9%.
CEO PAYDAY: What tech's top execs raked in for 2010
That's a significant comeback from 2009, when median cash compensation increased just 3% and total direct compensation declined 1%.
"Compensation for CEOs has returned to levels we haven't seen since before the economic crisis," said Doug Friske, global head of executive compensation consulting at Towers Watson, in a statement.
What does that mean for the tech industry? Here are 10 pay trends and observations gleaned from Network World's analysis of 36 tech companies' 2011 proxy statements.
1. Bonuses got bigger. Few tech CEOs saw their bonuses shrink in 2010. Most got bigger - and some by a lot. IBM CEO Sam Palmisano, for instance, earned a cash bonus of $9 million, which is nearly double the $4.8 million bonus he received in 2009. Cisco CEO John Chambers netted a bonus of $4.6 million, up from $2 million in 2009. NetApp CEO Tom Georgens got a $2 million bonus, up from $339,716 a year earlier.
2. Stock awards rose as performance improved. VMware grew revenue by 41% and profit by 81% in its 2010 fiscal year, and CEO Paul Maritz tripled his compensation, thanks to a grant of stock awards valued at $3.9 million (he didn't receive any equity awards in 2009). F5 Networks grew revenue and income by 35% and 65%, respectively, and CEO John McAdam received stock awards valued at $7.5 million (up 92% compared to a year earlier). EMC CEO Joe Tucci took home a $12.4 million package in 2010, including stock awards valued at $7.4 million (up 23%) and option awards valued at $1.3 million (up 39%); the company, meanwhile, reported a 21% revenue bump and 75% increase in net income.
3. Token gestures didn't amount to much. Oracle CEO Larry Ellison agreed to decrease his annual salary from $1 million to $1 last year. He's by no means the first: Apple CEO Steve Jobs and Google's Larry Page and Sergey Brin have been taking a $1 salary for years. The difference is, while Jobs, Page and Brin have declined any new stock awards as part of their compensation packages, Ellison typically nets tens of millions in equity grants. Last year was no exception: Ellison received option awards valued at $61.9 million in Oracle's 2010 fiscal year.
4. Some said no to big packages. Apple and Google aren't the only companies with execs who decline beefy pay packages. Microsoft CEO Steve Ballmer netted a modest $1.4 million pay package in 2010, which includes his $670,000 salary, a $670,000 cash bonus, and $11,121 in perks. Ballmer didn't receive any new equity awards in 2010, even though the company reported record revenue and grew its net income by 29%. Similarly, Michael Dell's 2010 pay package consisted of his $950,000 salary and $13,623 in perks; the Dell CEO didn't receive any equity awards or bonuses.
5. Nothing says goodbye like a generous severance. Former HP CEO Mark Hurd, who's now at Oracle, departed HP with a $12.2 million severance payment. John Swainson parted CA with a $4.5 million severance payment upon his retirement, and Extreme Networks' former CEO Mark Canepa collected $426,494 in severance pay after resigning in October 2009.