$84.6 Million Dollar Payday

Software engineering, marketing, and distribution giant Oracle once again made its billionaire co-owner/chief executive the highest paid CEO in America with a 2008 fiscal year compensation package of $84.6 billion, according to the Associated Press. Larry Ellison, who was already named the highest-paid CEO by Forbes in 2007 with $182 million in stock options for the year, is once again at the top of the list.

The friction primer has been pulled taught, readying once more the explosive debate over CEOs and their large payouts - an issue that gets particularly hot when election season rolls around.

A lot of people want to know why it is that in a slumping economy, CEOs are being hired at stratospheric rates, especially when their companies end the year with huge profit losses.  

New York's Daily News made a list of top-grossing CEOs whose compensation didn't quite reflect their accomplishments (or lack thereof). On that list there's Rick Wagoner who was hired as CEO for General Motors and led the company to a $39 billion loss in 2007. The freshly downsized automaker, hurt by lessened demand for their SUVs and trucks and lofty workers' benefits payouts, gave Wagoner a 64% pay raise to $15.7 million. Similarly Merrill Lynch brought on John Thain on December 1, 2007 with a package that added up to $83.1 million, making him the second highest paid CEO in America. Since then Merrill Lynch has been steamrolled by the sub-prime mortgage crisis, losing almost 60% of its stock value along the way.

Despite the value Ellison's goliath compensation package, Oracle's approach strikes me as a little less shady then some of the others we've seen lately. The majority of his payout will come from Oracle options set to expire in 2017 so if Ellison steers his 30-year-old company off the deep end, he'll see his earnings go down with it.

Of course, there's still the $25 billion dollars left over.

Your comments are always welcome here. You can also e-mail me directly at NCollard@cg3.com.