News Center

Elsewhere Online twitter Facebook SLS Blogs YouTube SLS Channel Linked In SLSNavigator SLS on Flickr

What the Boss Makes: Silicon Valley Companies Relying Less On Stock Options

Publication Date: 
June 06, 2009
San Jose Mercury News
Pete Carey and Jack Davis

Professor Joseph A. Grundfest, co-director of the Rock Center for Corporate Governance, is quoted in the San Jose Mercury News in an article about how companies in the Silicon Valley are adjusting how they compensate chief executives:

Silicon Valley companies are relying less on stock options — the rocket fuel that propelled them in the past few decades — and more on performance-based stock awards to compensate their chief executives, a trend that makes valley companies more like the rest of corporate America.


Hewlett-Packard bestowed nearly $34 million on CEO Mark Hurd last year. Oracle's Larry Ellison got $84 million — much of that in stock that will take time to mature — while cashing out $543.7 million in options awarded in previous years. And Cisco Systems' John Chambers was rewarded with $18.7 million in various forms of compensation, to take three examples among many.

Hurd's salary was cut by 20 percent, but his overall compensation rose by 30 percent as a result of options, stock awards and bonuses showered on him by a board apparently grateful for his leadership. But much of the money was for producing results — $23.9 million in bonuses for hitting one-year and multiyear performance targets.

"If Mark has a whole raft of stuff, my view is he's worth two rafts, given the job that he's done at Hewlett-Packard," said Joseph Grundfest, Stanford University law professor and co-director of the Rock Center for Corporate Governance.