Does CEO Pay Make The Difference

April 18, 2003
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GRAND RAPIDS — Now this really isn’t fair. But what the heck.

It struck us that it might be interesting to see whether there’s any correlation between the material on the stock performance and CEO compensation lists in this week’s Business Journal … that is, whether performance of a firm’s stock bears any relationship to the compensation and stock options accorded that firm’s leader.

Well, for starters, the third best performing stock on our list is Stryker Corp., and the firm’s CEO, John W. Brown, is listed as the second-best compensated of all the executives on our list.

Other close calls:

  • Richard Cook, the recently retired president and CEO of X-Rite Inc., placed tenth in compensation while X-Rite was eleventh in stock performance.

  • Meritage Hospitality Group Inc. was 17th in stock performance and its CEO and director was 13th in the compensation column.

Beyond that, the two lists correlate in what one could only call a perverse sort of way.

David Gibbons, president and CEO of Perrigo, places fourth in executive compensation while his firm placed 12th in stock performance. Placing eighth was Prab Inc., run by Gary Herder, chairman, president and CEO, who is listed as 16th in compensation.

Then there’s, the best-performing stock, that of Riviera Tool Co., which happens to be managed by Kenneth Rieth, who was in a tie for last place in the compensation department.

And right there with Rieth is Benjamin Smith III, chairman and CEO of Macatawa Bank Corp., which placed seventh on our stock performance chart.

Placing 15th in CEO compensation is Paul R. Sylvester, president and CEO of Manatron, which was the second-best performing stock.

Without meaning to rub in it, the best compensated CEO on our list is Michael Volkema of Herman Miller Inc., whose firm placed 18th on the stock performance list. And the other publicly traded giant in the furniture industry, Steelcase, placed 20th in stock performance while Jim Hackett, its boss, was third in compensation.

Like we said, it’s not fair.  

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