This just in. Paul Otellini, the CEO of the world's biggest chip maker, pulled down a cool $19 million in total compensation in 2012. The total compensation was up about 9 percent compared with 2011, according to a report by the Bloomberg news service.
Otellini's base salary also rose by about 9 percent to $1.2 million. The bulk of the $19 million was made up by non-salary compensation including Otellini's bonus, stock options, stock grants, pension and other benefits.
I can hear some engineers grumbling even now. The average base salary among North American EEs totals just over $100,000, according to the most recent EE Times Salary and Opinion Survey. And it's a pretty good bet that not one of them earned as much in additional compensation as Otellini. Was Otellini's performance in 2012 worth 190 average engineers?
The pay gap between the people at the top of the org chart and the rank and file has been a hot-button issue for years on the pages of EE Times and elsewhere. We took a little deeper dive into this a few years back.
Of course, there are those who will argue that a good CEO is infinitely more valuable than a rank and file engineer. Or even 190 of them. No matter where you stand on this issue, you have to acknowledge there is some truth to that. You can have hundreds of the best engineers in the world, but if no one is steering the ship the company is not going to succeed.
Don't forget, Otellini is famously not even an engineer (the first Intel CEO to hold that distinction). He's an MBA. He's paid by Intel's shareholders to protect and grow their investment. Investors don't necessarily care about Intel's industry leading process technology, tri-gates, 22-nm, or Sandy Bridge. They care more about the value of their investment. Just for the sake of discussion, Intel's stock price closed 2011 at $24.25 and was down to $20.62 by the end of 2012.
I think we can all agree that the CEO ought to be paid more than the average employee at a firm. Otherwise, who'd want the job? But things do appear to be tilted pretty far out of whack.