Compared with other countries, American companies compensate executives at a much higher level in relation to the average worker, said Robert R. Trumble, director of Virginia Commonwealth University's Labor Studies Center. There is a huge difference and it has grown over the last generation. But U.S. companies, including those in the Richmond area, must perform for their executives to reap the rewards, said G. Steven Harris, head of executive compensation for William M. Mercer's Southern regional office in Richmond. And that cuts both ways. Companies whose net incomes were up or whose stock climbed rewarded their executives accordingly, Harris said.
Circuit City is a good example.
Shareholders saw their Circuit City stock appreciate 81 percent last year. Earnings increased 33 percent at the company's core consumer electronics business, led by higher demand for digital products and personal computers. Plus, the retailer's CarMax automotive division, which Sharp also led as CEO, posted its first profit, albeit a small one. Kewer spent most of 1999 improving results, fending off a hostile takeover and trying to position the company to be sold. In addition to Snow and Siegel, executives from Ethyl Corp. and Dynex Capital Inc. received no bonuses in 1999.