Ray Irani
gets too much money, according to the California State Teachers’
Retirement System and an activist investor group. Last week the two
said they’d fight to get their own slate of directors on the board of
Irani’s employer, Occidental Petroleum Corp. of Westwood.
Irani certainly hauls a bundle.
Last year, he made off with $31.4 million in salary, bonuses and stock
awards. If you throw in the value of past options he exercised during
the year and stock grants that vested, he got close to $128 million.
But is that too much? Let’s compare:
• Robert Iger, the chief executive
of the Walt Disney Co., which is over the hill from Irani’s Oxy, got
$29.8 million in salary, bonuses and the like. In nearby Glendale,
DreamWorks Animation’s chief, Jeffrey Katzenberg, got $23.4 million.
Both got less than Irani’s $31.4 million but both run smaller companies.
• Dodger Manny Ramirez got a salary
of nearly $24 million last year. That figures out to $234,000 per hit.
(Let’s not even talk about this year.) By the way, Ramirez, 38, has
made $205 million over his career.
• Artist Alberto Giacometti’s
elongated sculpture called "Walking Man I" sold in February for more
than $104 million. (That nice price may have taken the sting out of the
sale of Giacometti’s bust of his brother, which sold for a mere $53
million.)
• Of course, Hollywood types need
wheelbarrows for their pay, too. Producer and director Michael Bay made
$125 million last year, according to Vanity Fair. Even actor Ben
Stiller made more than Irani last year. He got $40 million, thanks
largely to the upcoming flick "Little Fockers." Sure to be a classic.
• According to Forbes, Oprah
Winfrey last year earned $315 million. That comes out to $1 million a
day if you don’t count Sundays. (And it figures out to 10 times what
Irani made in salary and bonus.)
• Singers don’t do badly, either.
Beyonce Knowles made $87 million last year, again according to Forbes.
That kind of money must have put a poker face on Lady Gaga. She only
made $62 million, twice as much as Irani.
I used these people as examples
because each one, in his or her own industry, is a star. Even Ben
Stiller. And like it or not, they get star pay.
Of course, Oxy’s argument is that Irani is a star. Like it or not, he gets star pay.
To me, asking whether Irani gets "too much" is the wrong question. The right question is this: Is Irani really a star?
Well, an article in the Wall Street
Journal last week compared Oxy to its peers. It pointed out that in the
decade of the 2000s (Dec. 31, 1999 through Dec. 31, 2009), Exxon Mobil
gave shareholders a total return, which includes dividends, of 110
percent. Conoco Phillips shareholders enjoyed a total return of 185
percent. Oxy shareholders? 873 percent.
Let’s look at the more turbulent
recent times. According to my calculations, in the last three years
(June 30, 2007 through June 30, 2010), Oxy’s value as measured by its
market capitalization has increased by $15 billion, or 32 percent.
Stockholders? They’ve gained more than 40 percent.
Oh, how did CalSTRS, the teachers retirement fund, do over that span? Looks like its portfolio lost close to 15 percent of its value.
Maybe CalSTRS should have bought Oxy stock.