NEW YORK – More companies are listening to investors’ criticism that they overpay chief executives, but that doesn’t mean businesses have fixed the problem. CEO pay continued to climb in 2005, although not nearly as rapidly as in recent years, new surveys show. The median pay to CEOs rose 11.3 percent, according to a survey of more than 550 companies by The Corporate Library, a governance firm. For CEOs at the largest firms, however, pay rose 3.7 percent to a median of $5.2 million. But the size of the typical CEO’s raise varied greatly by which companies were counted, and overall figures obscure wide variations in pay. A closer look at individual companies show that more than one in four granted their CEOs raises of at least 25 percent, according to a survey of nearly 200 large firms by compensation analyst Equilar Inc. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREOregon Ducks football players get stuck on Disney ride during Rose Bowl eventThe newest raises for top executives mean the pay of the average CEO at a Standard & Poor’s 500 firm is now 430 times that of the average U.S. worker – more than 10 times what it was in 1980, according to the AFL-CIO. Once again, the largest payouts went to CEOs cashing in huge numbers of stock options. Tops on that list was Richard D. Fairbank, the chairman and chief executive of Capital One Financial Corp., the credit card issuer. Fairbank, who earned no salary or bonus, was paid almost entirely in a grant of new options this year, valued at just over $18 million. That paled, however, with the $249.3 million Fairbank earned last year by exercising previously issued options. The list of those who profited most handsomely from cashing in options also included Bruce Karatz, the CEO of builder KB Home Inc., who pocketed $118.4 million. In many cases, such gains went to executives who have held on to options for years, waiting for their stock price to rebound. In the past few years, many companies have cut back on the number of options they issue, moving to restricted stock and long-term incentive payouts. The days of huge options payouts are hardly over. More than 80 percent of large companies still include options in CEO compensation. But gauging the suitability of CEO pay packages increasingly requires investors and directors to focus on the size of future grants, rather than leftovers from the past, compensation experts say. And even as more companies embrace changes designed to link CEO pay to executives’ proven ability to deliver results over time, serious disconnects remain, experts say. “I think some of the companies are trying to improve the situation,” said Paul Hodgson, a compensation expert for The Corporate Library. “To be honest, if I can figure it out, I don’t see why people who are leading some of the largest companies in the country shouldn’t be able to figure it out as well.” The slow pace of change means some companies continue to pay CEOs far out of proportion to the results they deliver to shareholders, experts say. For example, AT&T Inc. – until recently known as SBC Communications Inc. – paid CEO Edward E. Whitacre Jr. $17.1 million last year, a 15 percent increase. That raise brought his total pay over the past five years to more than $85 million, despite the fact that shareholder return – the potential gain to investors who own its stock – is down 40 percent over that period, according to analysis by Hodgson’s firm. Directors at software maker Ariba Inc. paid CEO Robert M. Calderoni $10.4 million in 2005 – a large part of that in restricted stock – representing a 75 percent increase over the previous year. The raise came despite the fact that return to shareholders fell 39 percent last year, according to proxy advisory firm Institutional Shareholder Services Inc.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!
Share this:TwitterFacebookLinkedInMoreRedditTumblrPinterestWhatsAppSkypePocketTelegram Tags: IoT Leave a Reply Cancel reply You must Register or Login to post a comment. This site uses Akismet to reduce spam. Learn how your comment data is processed. Continue Reading Previous Interface Concept ComEth4510a dual Planes L2/L3 Ethernet Switch, selected by Thales for a radar applicationNext VadaTech announces MicroTCA chassis optimized for FPGAs IoT application development has already evolved largely into an integration problem. Developers can find all manner of IoT hardware devices that provide a growing number of near drop-in solutions for populating an IoT system’s layers of terminal sensor nodes and edge computing devices. Developers can similarly find solutions designed to fill those layers with software — from RTOSs in the periphery, high-performance Linux at the edge, and any manner of software running on the cloud’s virtual servers. In practice, of course, building an IoT application requires significant effort in making all of those pieces function as a single system and application while ensuring end-to-end security, availability, and reliability. Worse, large-scale enterprise IoT systems need to do this multiple times as they combine separate, specialized IoT systems into a functional whole. That’s a challenge facing many enterprise-level IoT developers — and one Mentor Graphics hopes to address with its Embedded IoT Framework.This notion of a network of IoT networks is a key requirement for success at the enterprise level. Mentor Graphics cites a view by McKinsey that 40% of the potential value of an IoT application depends on successful integration of multiple IoT systems. Integration of even one IoT system is work enough: Mentor notes a forecast by Gartner that in the near term, half of the cost of implementing IoT systems will be spent on integrating their individual components. Unlike IoT platforms, which are intended to simplify vertical integration of hardware to cloud systems, Mentor’s IoT framework seeks to ease both vertical and horizontal integration of systems implemented on various IoT platforms such as the Amazon Web Services (AWS) IoT Core, Microsoft Azure IoT Hub, and others.Frameworks have a long and somewhat tortured history in the electronics industry. Years ago, EDA companies including Mentor introduced comprehensive frameworks intended to simplify the integration of individual design tools from multiple providers into a “seamless” work flow. The problem then was not unlike what enterprise IoT developers face today. Of course, AWS and Microsoft Azure bear little resemblance to the point-tool providers of the EDA era. As far as the enterprise IoT developer is concerned, however, they are similar in that they provide just one piece of a larger, multi-system puzzle. What’s relevant here is the history lesson from those earlier frameworks: Despite heroic efforts, those EDA frameworks failed because they went too far, attempting micro-level integration. The added layers of software meant to normalize data, manage tool work flows, and support other design tasks paradoxically delayed availability of actual, workable integrated production design flows.With its IoT framework, Mentor took a different approach. Here, the company avoids inserting itself between the developer and IoT platforms such as AWS’s and Microsoft’s. Rather than attempt to provide a single software interface to all IoT platforms, the Mentor Embedded IoT Framework seeks to fill the existing implementation gaps that lead to the kind of costs that Gartner describes. In this framework, IoT platform SDKs are there, untouched, available for native use by the developer, but supplemented by services designed to fill the gaps (Figure).Figure. The Mentor Embedded IoT Framework intends to supplement commercial cloud SDKs with services needed to fill existing gaps in the implementation of enterprise IoT applications. (Source: Mentor Graphics) One of the implementation gaps that Mentor addresses relates to software updates. Although cloud providers support basic functionality for compiling and downloading a file, the cloud-level service typically lacks detailed information about device bootloader function, for example. Consequently, developers are left to create additional device-level services to define the specific actions required to safely deploy a software update package. Mentor fills the gap by providing more complete software-update services.That’s not to say that the Mentor Framework doesn’t sometimes provide more generalized alternatives to the cloud vendor’s solution. For example, AWS Greengrass lets IoT developers migrate portions of their cloud services to edge devices, using AWS Lambda functions to provide some cloud functionality even when the cloud connection is lost. Greengrass is a unique service that provides an important capability, but it remains an AWS-specific service. To add application- or service-level software to edge devices through a more general approach, developers could use industry-standard Docker containers to encapsulate and deploy their software. With the Mentor Embedded IoT Framework, developers can use either approach: AWS Greengrass with Lambda functions or use the framework’s support for Docker to deploy containerized software.The Mentor Embedded IoT Framework initially supports AWS and Microsoft Azure IoT platforms with planned support for Siemens, IBM Watson, and others. For more information, view the Mentor video or visit the Mentor Embedded IoT Framework site.