More often than not, income is discussed in terms of actual salary dollar amounts that are paid out each year through a paycheck issued once a week or every two weeks. While this is the traditional method of paying employees from the minimum wage earners to the top executives, it is not the only option that executives have.
The executive compensation package of the chief executive officer for one of the largest brand names in cereal production made an incredible sum under a structure that not only benefited himself, but the company as well. Post Holdings' CEO earned $22.7 million this past fiscal year despite his $1 salary under an ultimate pay-for-performance structure.
The money that was earned was provided for in stock and option awards. The breakdown under the non-traditional benefit plan was $9.8 million in stock awards and $12.8 million more in option awards. The value of the stock and option awards directly related to how well the company survived the separation with Ralcorp.
Not only was the CEO paid $22.7 million under this unique structure, but he also enjoyed other benefits that while not in actual dollars had significant value. Those included the personal use of the company's privately-owned aircraft, valued at around $103,000 and even the tax he would have to pay for the extra benefit.
The CFO of the company did not fare quite as well, but also incurred a very substantial non-traditional 2012 earnings. His base pay was $266,667, but he earned $593,750 in stock awards, $988,366 in options and other benefits all totaling up to $2.3 million.
Source: St. Louis Business Journal, "Post Holdings CEO Stiritz's total pay nears $23 million in 2012," Diana Barr, Jan. 2, 2013
An executive compensation package doesn't always have to be a win for one party and a sacrifice for the other. Our law firm helps executives negotiate a benefits package that works, even if it is a little more creative.