April 27, 2006 2:34 PM PDT

New Sun CEO a millionaire--and then some

Jonathan Schwartz, named Sun Microsystems' new chief executive on Monday, has a base salary of $1 million, the server and software maker disclosed in a regulatory filing Thursday.

And that's just for starters.

Schwartz, 40, also has the possibility of a bonus of another $2 million; 2 million stock options that vest at the rate of 400,000 per year over five years; 800,000 restricted shares that will be granted if performance criteria are met; and 1.5 million restricted shares that he'll get upon staying for a year.

Also on his perk list is "private jet access for business and reasonable personal use" and coverage of personal security expenses. If he loses his CEO job, he'll be eligible to receive three times his salary, the filing said.

Schwartz, promoted from president and chief operating officer, also has new responsibilities as a new board member.

Schwartz replaced Chairman Scott McNealy as the leader of a company with a reputation as a computing industry visionary but one saddled by lackluster financial results. McNealy said he's been grooming Schwartz for years to take over as CEO and that the company now is poised for revenue growth.

Some investors have sharply disagreed with Sun's executive pay, objecting last year that "Sun's compensation system has the potential to reward mediocre performance."

McNealy also profited from the change. He'll get a $1 million salary starting July 1, with an option for a bonus of another $1.5 million; 2.1 million stock options vesting over five years; and 350,000 restricted shares awarded if performance criteria are met.

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18 comments

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Does it surprise you????
Corporate america is littered with execs making ridiculous salaries.. do you think this would be any different? While the grunts(managers included) fight for 3% raises, the hip 'C' level execs get insane salaries, bonuses and perks... We all complain about athletes and how their salaries should be based on performance, are these 'C' levels any different? Don't get me wrong, they should make the most of all the IT folk, but the gap between the highest and lowest paid shouldn't be a frigen canyon.. Base it on performance and their subordinates review of them and you won't see as much BS type issues going on in companies like this.. They need to earn this type of money and not just get it based on the text after their names...

Just my 2-cents worth...
Posted by garlepp (5 comments )
Reply Link Flag
Salaries based on reviews by whom??
Reviews by subordinates? Might as well base the salaries of so called 'C' levels on these anonymous web form postings. Hmm flamingmaiden doesn't like the CEO, lets withhold salary this year...

Anyways, the salaries of these people are already based on performance. Why do you think companies started to give such salaries - it was done in order to attract a certain caliber of people. Now that it's common practice you can't just stop. Pre-Thatcher UK had 90+% tax on the 'C' levels. So what happened? They all got the normal range salaries, except the company provided them a car+driver, a villa, dinners, and everything else. People who do these jobs will always be compensated that much more. Guess we could have gone to business school instead of studying to be IT staff.
Posted by sanenazok (3449 comments )
Link Flag
No, it doesn't surprise me.
"Corporate america is littered with execs making ridiculous salaries.. "

Thats an asinine statement. Mr. Schwartz could leave Sun tomorrow, launch a startup, and cash out for x2 what he is earning now.

If you dislike the CEOs with leadership and vision who are actually creating momentum and direction, versus employees who just work enough to not get fired then go start your own company. Become the next google, but dont complain over jealously of another guys wallet.
Posted by vagarob (24 comments )
Link Flag
No, it doesn't surprise me.
"Corporate america is littered with execs making ridiculous salaries.. "

Thats an asinine statement. Mr. Schwartz could leave Sun tomorrow, launch a startup, and cash out for x2 what he is earning now.

If you dislike the CEOs with leadership and vision who are actually creating momentum and direction, versus employees who just work enough to not get fired then go start your own company. Become the next google, but dont complain over jealously of another guys wallet.
Posted by vagarob (24 comments )
Link Flag
Well, what *should* he make?
This whole discussion about limiting profits, or in this case limiting salaries, is such a huge waste. And if it ever happened, it would be a scary thing. Who decides who makes too much money? If $2M a year is too much, then what about $1M? And if $1M a year, then what about $500,000?

The bottom line is this: limiting profits -- even PUNISHING companies due to profits -- is wrong. The government needs to get their greedy hands off of profits made by Big Oil, Big Software, Big Hardware, whatever. Punishing companies and individuals because they are successful reeks of socialism. We're not a socialist country.

If it were you making $2M a year, you'd be singing the same tune.

And speaking of the profit-taking, specifically for Big Oil, have a look at this:

<a class="jive-link-external" href="http://www.taxfoundation.org/news/show/1178.html" target="_newWindow">http://www.taxfoundation.org/news/show/1178.html</a>

The government is making the money, not the oil companies. I have the feeling they are also profiting quite nicely off of Mr. Schwartz's salary as well.
Posted by andyengle (74 comments )
Link Flag
Does it surprise you????
Corporate america is littered with execs making ridiculous salaries.. do you think this would be any different? While the grunts(managers included) fight for 3% raises, the hip 'C' level execs get insane salaries, bonuses and perks... We all complain about athletes and how their salaries should be based on performance, are these 'C' levels any different? Don't get me wrong, they should make the most of all the IT folk, but the gap between the highest and lowest paid shouldn't be a frigen canyon.. Base it on performance and their subordinates review of them and you won't see as much BS type issues going on in companies like this.. They need to earn this type of money and not just get it based on the text after their names...

Just my 2-cents worth...
Posted by garlepp (5 comments )
Reply Link Flag
Salaries based on reviews by whom??
Reviews by subordinates? Might as well base the salaries of so called 'C' levels on these anonymous web form postings. Hmm flamingmaiden doesn't like the CEO, lets withhold salary this year...

Anyways, the salaries of these people are already based on performance. Why do you think companies started to give such salaries - it was done in order to attract a certain caliber of people. Now that it's common practice you can't just stop. Pre-Thatcher UK had 90+% tax on the 'C' levels. So what happened? They all got the normal range salaries, except the company provided them a car+driver, a villa, dinners, and everything else. People who do these jobs will always be compensated that much more. Guess we could have gone to business school instead of studying to be IT staff.
Posted by sanenazok (3449 comments )
Link Flag
No, it doesn't surprise me.
"Corporate america is littered with execs making ridiculous salaries.. "

Thats an asinine statement. Mr. Schwartz could leave Sun tomorrow, launch a startup, and cash out for x2 what he is earning now.

If you dislike the CEOs with leadership and vision who are actually creating momentum and direction, versus employees who just work enough to not get fired then go start your own company. Become the next google, but dont complain over jealously of another guys wallet.
Posted by vagarob (24 comments )
Link Flag
No, it doesn't surprise me.
"Corporate america is littered with execs making ridiculous salaries.. "

Thats an asinine statement. Mr. Schwartz could leave Sun tomorrow, launch a startup, and cash out for x2 what he is earning now.

If you dislike the CEOs with leadership and vision who are actually creating momentum and direction, versus employees who just work enough to not get fired then go start your own company. Become the next google, but dont complain over jealously of another guys wallet.
Posted by vagarob (24 comments )
Link Flag
Well, what *should* he make?
This whole discussion about limiting profits, or in this case limiting salaries, is such a huge waste. And if it ever happened, it would be a scary thing. Who decides who makes too much money? If $2M a year is too much, then what about $1M? And if $1M a year, then what about $500,000?

The bottom line is this: limiting profits -- even PUNISHING companies due to profits -- is wrong. The government needs to get their greedy hands off of profits made by Big Oil, Big Software, Big Hardware, whatever. Punishing companies and individuals because they are successful reeks of socialism. We're not a socialist country.

If it were you making $2M a year, you'd be singing the same tune.

And speaking of the profit-taking, specifically for Big Oil, have a look at this:

<a class="jive-link-external" href="http://www.taxfoundation.org/news/show/1178.html" target="_newWindow">http://www.taxfoundation.org/news/show/1178.html</a>

The government is making the money, not the oil companies. I have the feeling they are also profiting quite nicely off of Mr. Schwartz's salary as well.
Posted by andyengle (74 comments )
Link Flag
Who really determines CEO salaries?
The problem is that a CEO's salary and overall compensation is usually set by the compensation committee, which is staffed from the Board of Directors. Has anyone ever looked at who make up the compensation committees (and the Board)? They are almost all former CEO's and friends and cronies of senior management!! They hang out at the same clubs and conferences and always manage to reward each other at compensation time. Rarely do members of the board ever represent the small shareholder, or even god forbid, the employees or local communities! Until the Boards of these large companies start containing more appropriate representatives, these ex-CEO's and 'buddies' will keep giving each other these insane compensation packages. And by the way, this is not their money to give away, it is the stockholders money!!!!!
Posted by lazura (23 comments )
Reply Link Flag
Then, if the shareholders...
...don't like the CEOs getting paid so much, why don't they complain about it and let their voices be heard on the matter? I don't hear them doing that. As long as the CEO is making money for the shareholders, they will pay him/her for a job well done.
Posted by andyengle (74 comments )
Link Flag
Who really determines CEO salaries?
The problem is that a CEO's salary and overall compensation is usually set by the compensation committee, which is staffed from the Board of Directors. Has anyone ever looked at who make up the compensation committees (and the Board)? They are almost all former CEO's and friends and cronies of senior management!! They hang out at the same clubs and conferences and always manage to reward each other at compensation time. Rarely do members of the board ever represent the small shareholder, or even god forbid, the employees or local communities! Until the Boards of these large companies start containing more appropriate representatives, these ex-CEO's and 'buddies' will keep giving each other these insane compensation packages. And by the way, this is not their money to give away, it is the stockholders money!!!!!
Posted by lazura (23 comments )
Reply Link Flag
Then, if the shareholders...
...don't like the CEOs getting paid so much, why don't they complain about it and let their voices be heard on the matter? I don't hear them doing that. As long as the CEO is making money for the shareholders, they will pay him/her for a job well done.
Posted by andyengle (74 comments )
Link Flag
 

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