Silicon Valley chiefs in pay gains we can only gag over

NET RESULTS:With Ireland steeped in financial woes, chief executives in top US technology firms are raking it in

IF YOU are one of the many people fearing a job loss or are out of work, you might want to stop reading right now. You really will not want to know that the average technology company chief executive in the 145 largest Silicon Valley firms notched up a 37 per cent pay increase last year, despite the general economic malaise around the world.

To be fair, the reason for the pay boost is because technology is one of the industries leading the world out of the recession and, as a sector, it has been putting in a generally strong performance (something which is underlined by the fact that Ireland has been showing quite strong export growth despite the downturn, thanks to the presence of many leading technology companies in the State).

Earnings in many of the Silicon Valley’s biggest technology companies hit record levels in 2010, which is truly startling when you are hunkered down in the maelstrom of Ireland’s economic situation. You can tend to forget that Ireland’s woes are not general to the rest of the world.

And, while chief executive pay dropped when the recession bit hard in 2008 and 2009 (by about 5 per cent each year), it rose for chief executives by 28 per cent across the Standard Poor’s 500 as a whole in 2010, as industries began to recover. So fattening pay cheques were not simply a tech-oriented phenomenon.

Still, the news that the median compensation package for this group of Silicon Valley chief executives totals – wait for it – $2.8 million (€1.9 million) in 2010, is likely to stimulate a gag reflex in just about anyone not in such stellar pay ranks.

The fact that the average worker in these companies didn’t see anything close to similarly increases in their pay packets last year might grate a bit, as well.

Those not gagging will certainly include executives in the SP 500 as, according to an annual salary survey prepared for the San Jose Mercury News newspaper by Equilar, an executive compensation research firm in Redwood City, the median package for the SP crowd, is about $9 million annually.

So, while technology chief executives may be viewed as among the best paid, their colleagues at large companies in other industries greatly surpass them as a general rule.

The survey indicates a fairly broad spread of compensation packages among the Silicon Valley chief executives. There is Apple founder and chief executive Steve Jobs, whose entire salary for 2010 totals just $1. That’s all he has ever received by way of formal payment since he returned to the company, despite its phenomenal recovery and growth.

Of course, his board tends to thank him rather elaborately – one year, with a personal helicopter (as you do).

At the other end of the scale, and leading the boards with the highest annual pay for the fourth year in a row is Oracle founder and chief executive Larry Ellison. While you might be inclined to feel he was generous in his willingness to take a 17 per cent pay cut this past year, he still took home a staggering $70 million for a single year’s work.

Most of that was in stock, but he still pocketed over $8 million in cash.

Next in the list of the top five is Steve Laub of Atmel, with a package worth just over $19 million. In third place is John Chambers of Cisco Systems at just under $19 million. Intel’s Paul Ottelini took home $15.5 million, and in fifth place, John Martin of Gilead Sciences earned just over $14 million.

Not officially included in the top five is former Hewlett-Packard chief executive Mark Hurd, who earned nearly $24 million, including about $12 million in severance payments, when he resigned before the end of the fiscal year.

And yes, I know what you are probably thinking. Atmel? What in the world is Atmel?

According to the company’s website, “Atmel Corporation is a worldwide leader in the design and manufacture of microcontrollers, capacitive touch solutions, advanced logic, mixed-signal, nonvolatile memory and radio frequency (RF) components.”

So now you know.

If you have a read of the full list of 145 companies, chances are the majority will be ones you have never heard of, even if you are an avid industry watcher.

It just goes to show how diverse this sector is and how much wealth is generated within and outside its leading companies.

If I were in IDA Ireland, I’d be thinking that salary survey would be a good inward investment hit list to work from, to try and spread a little of that cash back to the ould sod. View the full list on siliconvalley.com/ci_18314928