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John Coyne is the CEO of OC-based Western Digital, a manufacturer of hard drives, and the company announced this morning that as part of a cost-cutting effort that includes 2,500 layoffs, he and several other senior executives would be reducing their salary. (The OC Register has the story) Instead of a base pay of $900,000 in 2009, Coyne would now make $600,000. A $300,000 pay cut sounds like a nice gesture, but it’s worth noting that in Western Digital's latest proxy statement, Coyne's total compensation in 2007 was $12.6 million. Of that total, $6.1 million went for stock awards and $4.8 million covered non-equity incentive plans. These are not especially outrageous numbers, at least compared with other CEOs, but neither are they insignificant. They speak to a structural disconnect between what CEOs actually make - that is, base salary and perhaps bonus - and what they could potentially reap via stock options and other incentives.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.