Big bonuses are back. Nine tech CEOs received cash bonuses of $3 million or more in 2010, and another 13 netted at least $1 million in bonus money, according to our analysis of tech execs' pay packages.
[CEO PAYDAY: What tech's top execs raked in for 2010]
Across all industries, CEO compensation had tapered off the last couple of years but came climbing back in 2010. In particular, cash bonuses grew significantly, according to The Wall Street Journal/Hay Group 2010 CEO Compensation Study.
The study, which looks at compensation for CEOs at 350 of the largest U.S. companies, found that base salaries remained flat at $1.1 million - but annual incentive-based bonuses increased by 19.7% to $2.2 million. The sharp gains in bonus amounts led to a 12.8% increase in overall cash compensation.
Among 38 pay packages that Network World examined, IBM CEO Sam Palmisano pocketed the largest cash bonus -- $9 million - in a year that saw IBM achieve record profit and surpass its earnings-per-share goals. Here are the details on the nine biggest cash bonuses in our tech-focused tallies, plus a list of 13 other tech execs whose bonuses exceeded $1 million.
Who: IBM CEO Sam Palmisano
Bonus amount: $9 million
Total 2010 compensation: $31.7 million
Company performance: IBM grew revenue and income by 4% and 10%, respectively, in its 2010 fiscal year ended Dec. 31. Revenue came in at $99.9 billion, up from $95.8 billion in 2009. Net income hit $14.8 billion, up from $13.4 billion.
Justification for bonus: IBM CEO Sam Palmisano's $9 million award represents an 89% increase over the $4.8 million bonus he received in 2009. In justifying the bonus, IBM cited a number of favorable results achieved in 2010, including: record profit and cash flow; earnings-per-share of $11.52, surpassing the high end of its EPS target set back in 2007; and 17 acquisitions for $6.5 billion.
Who: Oracle CEO Larry Ellison
Bonus amount: $6.5 million
Total 2010 compensation: $70.1 million
Company performance: Oracle grew revenue 15% -- from $23.3 billion in 2009 to $26.8 billion in 2010 - in its fiscal year ended May 31, 2010. Net income climbed 10% from $5.6 billion to $6.1 billion.
Justification for bonus: Oracle awarded Larry Ellison a $6.5 million bonus, up significantly from the $3.6 million he netted in 2009. "For fiscal 2010, our named executive officers each received a cash bonus ... that was approximately 155% of their target bonuses and were paid an average of 78% more than the bonus amounts they were paid in fiscal 2009," Oracle said in its proxy statement. The big increase is because the company's non-GAAP pre-tax profits grew significantly during fiscal 2010 and exceeded the target levels set by the compensation committee, Oracle says.
Who: Motorola Solutions CEO Greg Brown
Bonus amount: $5.9 million
Total 2010 compensation: $13.7 million
Company performance: Motorola Solutions CEO Greg Brown and Motorola Mobility CEO Sanjay Jha oversaw Motorola's split into two separate companies, which was finalized in January of this year.
Justification for bonus: Brown, who runs the enterprise-focused Motorola Solutions, pocketed a $5.9 million bonus for 2010, far surpassing the $836,931 bonus he earned a year earlier. Motorola said the bigger payouts under its incentive plan are due to improved financial performance, including an increase in net sales and operating earnings (the company's operating earnings rose to $789 million in 2010, compared to an operating loss of $492 million in 2009).
[BY THE NUMBERS: Perks drive up pay for tech CEOs]
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