As corporate executives go, David L. Kalkbrenner is a bargain at least to the editors at Forbes.com.
Last week the online companion to the business magazine ranked 278 chief executive officers, measuring their compensation against their companies total growth rate in the past five years.
Forbes.com derived total growth rates by averaging a companys sales, net income, and share-price growth between 1995 and 2000. It then divided that figure into the CEOs cumulative compensation, with the result being the cost in terms of CEO salary dollars of each percent of total growth.
Mr. Kalkbrenner, CEO of $5.4 billion-asset Greater Bay Bancorp in Palo Alto, Calif., was paid $99,966 for each 1% of growth. That was good enough for seventh place overall and first among the 57 bank CEOs on the list but well behind top dog Warren E. Buffet, whose salary equaled a scant $19,000 per 1% of growth, which earned him first place in the survey.
Mr. Kalkbrenner, who earned a total of $4.06 million in the period, seemed pleased by the outcome. What this [list does] is provide a response to people who question me about my salary, he said.
Banking was far and away the best-represented industry group on the list, but only by chance, said editor Matthew Herper. Starting with Forbes list of the countrys 800 biggest companies, the Web site discarded any that changed CEOs or posted an annual loss between 1995 and 2000.
Perhaps one of the biggest surprises in the survey was that Citigroup Inc. CEO Sanford I. Weill ranked 262d, despite the companys total growth rate of 21.3%. Why? His compensation totaled $785.2 million, which meant each 1% of Citis growth cost more than $36 million.
The second-highest-rated banker was Vernon Hill, chairman and president of $8.9 billion-asset Commerce Bancorp in Cherry Hill, N.J., who ranked 17th overall. He earned $5.9 million between 1995 and 2000.
Like Mr. Buffet, Mr. Hill owns a significant portion of his company, which he said makes a Weill-like salary unnecessary. As a large shareholder Im getting compensated that way, he said.