Magazine article Newsweek

A New Way on CEO Pay; the Execs on Trial Got Big Bucks to Act like Owners, but Krispy Kreme's New Boss Is Paid by the Hour. Hmmm

Magazine article Newsweek

A New Way on CEO Pay; the Execs on Trial Got Big Bucks to Act like Owners, but Krispy Kreme's New Boss Is Paid by the Hour. Hmmm

Article excerpt

Byline: Allan Sloan

When it comes to paying someone to run your company, it's dollars to doughnuts that Krispy Kreme's new chief executive, Stephen Cooper, is a sweet deal for shareholders. Instead of gobbling all the stock options he can get, like a typical CEO, Cooper made a deal last week to work on the meter. His firm, Kroll Zolfo Cooper, gets $760 an hour for his services, and $695 an hour for one of his partners to be chief operating officer.

We're not talking poverty wages here: Cooper would get $1.52 million a year for a 40-hour week with two weeks off. There may be a success bonus down the road, and as we'll soon see, the whole deal's a can't-miss. Even so, hourly billing is a delightful contrast to the two failed CEOs who went on trial last week--Bernie Ebbers of WorldCom and Richard Scrushy of HealthSouth--and to Enron's Ken Lay, scheduled to go on trial later this year.

This trio reaped a combined $1 billion or so by being CEOs--and each claims to have been misled by his chief financial officer. In other words, they made all this money but didn't know what was going on at the companies they ran.

Ebbers knocked down at least $475 million at WorldCom, by my count. More than $400 million of it was a company loan, since defaulted; the rest was salary, bonuses, stock sales and stock-option profits. Lay got $325 million from salary, bonuses and stock sales and option profits, and Scrushy around $125 million. These numbers are based on company filings and data from Thomson Financial. …

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