CALIFORNIA'S HIGHEST-PAID EXECUTIVES : Bonuses, Stock Options Play Big Role in Pushing Average Compensation to $2.43 Million a Year

By BILL SING

May 14, 1989 12 AM PT

<i> Times Staff Writer </i>

When Michael D. Eisner and Frank G. Wells took over as top executives at troubled Walt Disney Co. in 1984, they took smaller base salaries in exchange for a shot at lucrative bonuses and stock options. If they turned the firm around, the bonuses and stock options would kick in and earn them far more than what they gave up in base salaries.

Such confidence has paid off handsomely for the Disney duo. The $40.1 million and $32.1 million that Eisner and Wells earned in 1988--mostly in bonuses and stock options--made them by far the highest-paid managers last year in The Times’ annual survey of executive compensation at California-based, publicly held companies.

Based on a review of proxy statements or other documents of 260 companies statewide, the survey was conducted by the Los Angeles office of the human resources consulting firm of William M. Mercer Meidinger Hansen.

It shows that many top California executives continue to enjoy pay increases that far outstrip inflation and the rate of pay increases given to lower-level employees. The survey also shows continued widespread use of stock options--rights to purchase shares at a certain price for a specified period, that can pay off handsomely if a company’s stock price rises. Each of the 10 highest paid executives earned at least $2 million alone from exercising options.

However, compensation in general continues to show little or no correlation between pay and performance, said Michael O. McCullough, a Mercer Meidinger Hansen principal and survey director.

“It’s more competitively driven than performance driven,” McCullough said, noting that compensation committees of company boards of directors generally feel compelled to offer at least the average pay scales in their industries to attract and keep top executives.

The survey also highlighted the continued widespread use of golden parachutes, the controversial arrangements giving generous severance pay to executives ousted when their companies are taken over. Fifty-five of the 100 highest-paid executives have these potentially lucrative arrangements.

Total pay--including base salary, bonuses and long-term compensation such as stock options exercised--averaged $2.43 million for the top 100, or about $1,150 an hour based on a 40-hour work week. That was a gain of 38% over the $1.76-million average for last year’s top 100, far exceeding 1988’s 4.4% inflation rate and 5% rise in base salaries for all employees.

However, excluding Eisner and Wells, the average for the top 100 was considerably lower--$1.74 million--falling below the 1987 average.

Altogether, some 91 California executives joined the $1-Million Club in 1988, compared to 80 the previous year and 56 in 1986. “Maybe next year they’ll all be millionaires,” said William F. Spear, a consultant at Mercer Meidinger Hansen, noting the growing lack of distinction in reaching that formerly exalted plateau.

However, no women cracked the Top 100 list, compared to two making the 1987 list.

No One Tops Milken

Dominating the highest ranks of the 1988 list were executives from entertainment and high-technology industries. Executives from two entertainment companies--Walt Disney and MCA Inc.--held six of the top 10 spots. Electronics concern Hewlett-Packard placed five executives in the top 25.

Disney’s Eisner and Wells, who ranked fourth and ninth on the 1987 list, were also the top paid executives in 1988 nationwide. But they still trailed the $200 million earned last year by Michael Milken, head of Drexel Burnham Lambert’s lucrative high-yield “junk bond” operation in Beverly Hills.

Are these executives worth it? At least in the case of Eisner and Wells, many Disney shareholders and analysts say yes.

When Eisner and Wells joined Disney in 1984, its stock was selling for around $12 and its market value--how much it would take to buy all the stock at the then-current price--was about $1.6 billion, said Jeffrey B. Logsdon, who follows Disney at the Los Angeles investment firm of Crowell, Weedon & Co.

But now--after an array of hit films, growth in theme parks, strong earnings gains and other successes--Disney stock is selling for about $85 and its market value has ballooned to about $11.6 billion, Logsdon said. Thus, few shareholders are batting eyes at the $32.6 million and $28.4 million that Eisner and Wells earned by exercising stock options last year.

“This is a classic win-win situation,” Logsdon said.

Shareholders also like the Eisner and Wells pay plans for another reason. Much of their cash compensation--usually base salary plus bonuses--was linked directly to company performance. Eisner, for example, was paid a $6.7-million bonus (compared to a base salary of $750,000) under an incentive plan under which he earned 2% of the amount that Disney’s net income exceeded a 9% return on stockholders’ equity.

“If his compensation is tied to performance, the sky’s the limit,” said Ralph Whitworth, director of the United Shareholders Assn., a Washington shareholder rights group.

Some companies, such as Security Pacific and Chevron, have linked both cash and stock compensation to certain performance goals such as a minimum return on equity or increase in revenue.

Unfortunately, experts say, pay plans of most other executives don’t link cash or stock awards to performance goals.

Cuts Rarely Taken

While many boards of directors would like to link cash awards to reaching goals, in practice they generally guarantee salary increases in employment contracts regardless of performance, Mercer’s McCullough said. Members of compensation committees of boards of directors--who decide the pay and incentives for executives--usually are hand-picked by those executives and thus give in to their wishes, critics say.

Pay hikes awarded in contracts usually remain in effect regardless of how well an executive’s company fares, just like contracts for professional athletes guarantee salaries even if the athlete has a bad year.

But unlike athletes whose star has faded, executives whose companies are on the skids rarely take large pay cuts when their contracts are up for renewal.

Cash compensation also tends to rise because executives demand--and get--pay above the average for executives at similar firms in their industry. That, of course, ensures that industry averages will rise automatically in a never-ending spiral.

Executive compensation in other countries, such as Japan, is far lower, with a far lower gap between the highest-paid and lowest-paid employees of any given company. That perhaps results from a belief in those countries that the top executives are less responsible for the successes or failures of their firms than American executives.

Even the growing use of stock options--which now extend to members of boards of directors--has drawn criticism from some compensation experts and shareholder activists. In theory, most shareholder activists support granting options for managers, because they reward executives for higher stock prices and make the executives act like shareholders.

But, critics say, many executives are given options without having to give up any part of their cash or other compensation. That, these critics say, acts as a disincentive to good performance.

Critics also say too many executives get stock options for free or at little cost, and the stock price doesn’t have to rise much for the options to become valuable. Some companies, they also charge, give executives too much stock through options, excessively diluting the ownership percentages of other shareholders.

Little Impact on Stock Price

And, they say, too many executives turn around and sell most or all of the stock they receive from exercising stock options. Indeed, there appears to be little evidence that the percentage of stock owned by top management at publicly held firms has reversed its decades-long decline.

Also, movements in a company’s stock price may have little to do with actions of management. Stock prices of most companies went up anyway between 1982-87, thanks to the torrid bull market. Conversely, few executives could be blamed for the tumble in their stock prices as a result of the October, 1987, stock market crash.

Accordingly, as a result of the crash, many companies--particularly smaller ones--last year reissued stock option plans with lower “strike” prices at which the options could be exercised, McCullough said. In California, companies revaluing stock options include Northrop and Columbia Savings.

But those moves to revalue stock options also have drawn criticism and some shareholder lawsuits. “Shareholders are saying, ‘Nobody repriced what I paid for my stock. Why should executives get that privilege?’ ” McCullough said.

Golden parachutes also continue to draw criticism as they keep growing. A nationwide survey by Mercer Meidinger Hansen showed 23% of publicly traded companies--and 41% of the 100 largest companies--reporting the use of the plans over the last year.

Shareholder activists say these plans are often excessive and may reward executives for poor performance.

Two executives, Ronald D. Strongwater and Lawrence P. Friedman of Wickes Cos., ranked 44th and 49th in the survey, received golden parachute payments of $1.12 million and $1.03 million each, even though they stayed with the company following its takeover last year by two East Coast investment groups.

Shareholder activists complain that golden parachutes are rarely offered to shareholders for approval. A bill proposed last year in Congress to require shareholder approval of the severance plans was squashed following objections by business, said Whitworth of the United Shareholders Assn.

But even if shareholders could vote on golden parachutes, they might approve them anyway, judging by how easily other types of plans are approved. Although some institutional shareholders are becoming more vigilant, few challenge or vote against executive compensation plans proposed by management, said Howard D. Sherman, director of research for Institutional Shareholder Services Inc., a Washington consulting firm.

“There has yet to be a stock option or any compensation-related proposal that has ever come close to being defeated at a major company,” Sherman said. “These are the most complex issues to read through in a proxy, and you’re basically speculating on a payoff that doesn’t happen for a number of years. Most shareholders who don’t get it give management the benefit of the doubt and vote for them.”

But the blame shouldn’t fall entirely on shareholders. Disclosure of executive pay plans in proxies is often shrouded in legalese that few understand.

“These proxies are so damn hard to read,” Sherman said. “If they were presented in short sentences, no shareholder in his or her right mind would vote for these things.”

Also, votes on such matters usually are not confidential, meaning that management can find out who voted against their pay plans. That causes many pension fund investment managers--who as a group control more than half of the stock in American publicly traded corporations--to shy away from voting against managements who award contracts for managing their own pension funds.

Data for the executive compensation survey was compiled by the Los Angeles office of the human resources consulting firm William M. Mercer Meidinger Hansen, which reviewed the proxy statements of 260 of California’s largest publicly held companies.

California’s Highest-Paid Executives

Name Title(s) Company 1 MICHAEL D. EISNER COB, CEO Walt Disney Co. 2 FRANK G. WELLS P, COO Walt Disney Co. 3 SIDNEY JAY SHEINBERG P, COO MCA 4 MILLARD S. DREXLER P, CEOS,PS Gap Inc. 5 JOHN A. YOUNG P, CEO, VCH Hewlett-Packard 6 IRVING AZOFF VP MCA 7 RICHARD A. NUNIS PS Walt Disney Co. 8 THOMAS SPIEGEL COB, CEO Columbia Savings & Loan 9 THOMAS WERTHEIMER EVP MCA 10 DEAN O. MORTON EVP, COO Hewlett-Packard 11 C.R. WEAVER COB, CEO Clorox 12 RICHARD C. ALBERDING EVP Hewlett-Packard 13 *JOHN SCULLEY CEO, P, COB Apple Computer 14 ARMAND HAMMER COB, CEO Occidental Petroleum 15 THOMAS P. POLLOCK VP MCA 16 RAY R. IRANI P, COO Occidental Petroleum 17 CARL E. REICHARDT COB Wells Fargo 18 WILLIAM E. TERRY EVP Hewlett-Packard 19 AARON SPELLING COB, CEO Aaron Spelling Productions 20 LAWRENCE K. FISH P, COO Columbia Savings & Loan 21 W. BRUCE SEATON COB, CEO, P American President Cos. 22 JAMES F. MONTGOMERY COB, CEO Great Western Financial 23 FERNAND OSTIGUY EVP Measurex 24 JOHN L. DOYLE EVP Hewlett-Packard 25 CHARLES R. SCOTT P, CEO Intermark 26 J.W. CWIERTNIA P National Education 27 JOHN W. COLLINS P, COO Clorox 28 FRED CARR P, COB First Executive 29 RICHARD J. FLAMSON III COB, CEO, DIR Security Pacific 30 GEOFFREY W. SQUIRE VP, CEOS Oracle Systems 31 JOHN R. LUONGO SVP Oracle Systems 32 CHARLES D. MILLER COB, CEO Avery International 33 LEE RICH FCOB, CEO MGM/UA 34 LODWRICK M. COOK COB, CEO Atlantic Richfield 35 GARY L. WILSON EVP, CFO Walt Disney Co. 36 RICHARD K. EAMER COB, CEO National Medical Enterprises 37 JAMES W. BAGLEY P, COO Applied Materials 38 GEORGE F. MOODY P, COO, DIR Security Pacific 39 *BRUCE KARATZ EVP, CEOS, PS Kaufman & Broad 40 *A.W. CLAUSEN COB, CEO BankAmerica 41 DAVID H. MURDOCK COB, CEO Castle & Cooke 42 DOUGLAS S. CRAMER EVP Aaron Spelling Productions 43 STEVEN F. UDVAR-HAZY P International Lease Finance 44 H. DAVID BRIGHT COB, CEO National Education 45 ROBERT I. WEINGARTEN COB, P, CEO First Capital Holdings 46 RONALD D. STRONGWATER VP Wickes Cos. 47 DONALD G. FISHER COB, CEO Gap Inc. 48 LAWRENCE J. ELLISON P, CEO Oracle Systems 49 STANLEY R. ZAX COB, P Zenith National Insurance 50 E. DUKE VINCENT PS Aaron Spelling Productions 51 LAWRENCE P. FRIEDMAN VP Wickes Cos. 52 GEORGE M. KELLER RCOB Chevron 53 JAMES R. HARVEY CEO, COB Transamerica 54 ROBERT W. BRUCE III VP, CIO Fireman’s Fund 55 JOSEPH J. PINOLA CEO, COB First Interstate Bancorp 56 DAVID A. SACHS EVP Columbia Savings & Loan 57 RAYMOND D. EDWARDS COB Glenfed 58 WILLIAM M. McCORMICK P Fireman’s Fund 59 NEAL HARRIS EVP Price Co. 60 ROBERT F. ERBURU COB, CEO Times Mirror 61 JOSEPH SHAPIRO SVP, GC Walt Disney Co. 62 LEONARD COHEN P, COO National Medical Enterprises 63 *NEIL E. HARLAN COB McKesson Corp. 64 *THOMAS W. FIELD Jr. P, CEO McKesson Corp. 65 MICHAEL D. DINGMAN COB, CEO, MDIR Henley Group 66 MAURICE L. McALISTER P Downey S&L; 67 LESLIE L. GONDA CEO International Lease Finance 68 LOUIS L. GONDA EVP, SECY International Lease Finance 69 *LLOYD E. COTSEN CEO, P Neutrogena Corp. 70 LAWRENCE O. KITCHEN COB, CEO Lockheed 71 *ELI BROAD COB, P, CEO Kaufman & Broad 72 BERNARD I. FORESTER COB, P, CEO Anthony Industries 73 JOHN J. BYRNE COB, CEO Fireman’s Fund 74 GORDON S. MARSHALL COB, CEO, COO Marshall Industries 75 PAUL A. MILLER COB, CEO Pacific Enterprises 76 SHELDON N. LEWIS EVP, DIR Clorox 77 ROBERT A. BOLINGBROKE GVP Clorox 78 RAY A. BURKE EVP Unocal 79 JOJI HAYASHI VCH American President Cos. 80 JAMES A. MIDDLETON EVP Atlantic Richfield 81 ROBERT E. WYCOFF P, COO Atlantic Richfield 82 JAMES S. MORRISON EVP Atlantic Richfield 83 KENT KRESA P, COO Northrop 84 WALTER W. MACAULEY CEO, P Adia Services 85 ALAN LADD Jr. COBS, CEOS MGM/UA 86 *RICHARD H. DEIHL CEO, COB H.F. Ahmanson 87 *HENRY GLUCK COB, CEO Caesars World 88 ROBERT W. FISHER P, COO Castle & Cooke 89 CHARLES R. SCHWAB COB, CEO Charles Schwab Corp. 90 *PAUL M. COOK COB, CEO Raychem 91 BERNIE BRILLSTEIN DIR Lorimar Telepictures 92 *ORION L. HOCH COB, CEO, DIR Litton Industries 93 *DAVID T. MITCHELL P, COO Seagate Tech 94 LARY R. SCOTT P, CEO Consolidated Freightways 95 ROBERT H. SMITH VCH, CEOS, PS Security Pacific 96 *R.M. ROSENBERG VCH BankAmerica 97 *FRED W. O’GREEN DIR, CEC Litton Industries 98 *MICHAEL H. SPINDLER SVP, PS Apple Computer 99 RICHARD J. PEARSON P, COO Avery International 100 BARRON HILTON COB, CEO, P Hilton Hotels

Gold. parachute/ 1987 1988 Name emp. agreement Total Cash 1 MICHAEL D. EISNER No/Yes 6,729,654 7,505,699 2 FRANK G. WELLS No/Yes 3,389,827 3,777,849 3 SIDNEY JAY SHEINBERG Yes/Yes 559,000 582,292 4 MILLARD S. DREXLER Yes/Yes 1,209,476 1,481,538 5 JOHN A. YOUNG No/No 1,875,409 1,217,520 6 IRVING AZOFF Yes/Yes 559,000 744,037 7 RICHARD A. NUNIS No/No 387,348 775,000 8 THOMAS SPIEGEL Yes/Yes 3,960,000 4,075,445 9 THOMAS WERTHEIMER Yes/Yes 1,337,781 582,292 10 DEAN O. MORTON No/No 1,146,554 754,956 11 C.R. WEAVER Yes/Yes 575,000 663,595 12 RICHARD C. ALBERDING No/No 629,801 501,193 13 *JOHN SCULLEY Yes/No 2,140,000 2,479,000 14 ARMAND HAMMER Yes/Yes 1,937,559 2,454,637 15 THOMAS P. POLLOCK Yes/Yes 559,000 636,692 16 RAY R. IRANI Yes/Yes 2,311,388 2,385,514 17 CARL E. REICHARDT No/No 2,323,500 1,330,000 18 WILLIAM E. TERRY No/No 1,233,374 502,424 19 AARON SPELLING No/Yes 3,089,272 2,070,038 20 LAWRENCE K. FISH No/No NA 2,054,650 21 W. BRUCE SEATON Yes/Yes 763,035 729,315 22 JAMES F. MONTGOMERY Yes/Yes 1,128,500 1,293,667 23 FERNAND OSTIGUY No/No 387,994 424,423 24 JOHN L. DOYLE No/No 1,931,145 501,161 25 CHARLES R. SCOTT No/No 557,780 860,606 26 J.W. CWIERTNIA Yes/Yes 247,500 695,251 27 JOHN W. COLLINS Yes/Yes 422,000 461,533 28 FRED CARR No/Yes 2,014,350 1,804,734 29 RICHARD J. FLAMSON III Yes/No 1,009,200 1,439,800 30 GEOFFREY W. SQUIRE No/No 296,350 450,573 31 JOHN R. LUONGO No/No 256,570 392,150 32 CHARLES D. MILLER Yes/Yes 804,450 898,333 33 LEE RICH No/Yes 1,689,364 1,630,428 34 LODWRICK M. COOK No/No 1,450,030 1,619,489 35 GARY L. WILSON No/No 1,000,000 1,600,000 36 RICHARD K. EAMER Yes/Yes 1,188,890 1,590,309 37 JAMES W. BAGLEY No/No 225,014 402,212 38 GEORGE F. MOODY Yes/No 734,800 1,040,000 39 *BRUCE KARATZ Yes/Yes 3,090,536 1,507,081 40 *A.W. CLAUSEN Yes/No 775,000 1,500,000 41 DAVID H. MURDOCK No/No 1,200,000 1,500,000 42 DOUGLAS S. CRAMER No/Yes 2,850,052 1,479,519 43 STEVEN F. UDVAR-HAZY No/Yes 1,195,494 1,477,547 44 H. DAVID BRIGHT Yes/Yes 459,000 1,161,352 45 ROBERT I. WEINGARTEN No/Yes 950,000 1,437,500 46 RONALD D. STRONGWATER Yes/Yes NA 1,377,908 47 DONALD G. FISHER No/No 731,815 1,374,026 48 LAWRENCE J. ELLISON No/No 711,875 1,362,500 49 STANLEY R. ZAX Yes/Yes 1,200,000 1,350,000 50 E. DUKE VINCENT No/Yes 1,805,833 1,333,749 51 LAWRENCE P. FRIEDMAN Yes/Yes NA 1,308,524 52 GEORGE M. KELLER No/No 1,524,895 1,043,299 53 JAMES R. HARVEY Yes/Yes 1,300,000 1,300,000 54 ROBERT W. BRUCE III Yes/Yes 1,165,000 1,281,923 55 JOSEPH J. PINOLA Yes/Yes 1,508,854 950,916 56 DAVID A. SACHS No/No 1,040,000 1,250,000 57 RAYMOND D. EDWARDS Yes/Yes 1,156,826 684,095 58 WILLIAM M. McCORMICK Yes/Yes 1,736,193 1,124,539 59 NEAL HARRIS No/No NA 140,854 60 ROBERT F. ERBURU No/No 1,302,308 1,200,000 61 JOSEPH SHAPIRO No/Yes 250,000 500,000 62 LEONARD COHEN Yes/Yes 882,946 1,173,976 63 *NEIL E. HARLAN Yes/Yes 1,099,500 1,164,442 64 *THOMAS W. FIELD Jr. Yes/Yes 951,125 1,164,047 65 MICHAEL D. DINGMAN Yes/No 1,085,000 1,160,000 66 MAURICE L. McALISTER Yes/No 367,765 1,156,687 67 LESLIE L. GONDA No/Yes 1,198,814 1,153,698 68 LOUIS L. GONDA No/Yes 1,195,494 1,153,698 69 *LLOYD E. COTSEN Yes/No 1,005,584 1,150,000 70 LAWRENCE O. KITCHEN No/No 1,365,791 1,145,746 71 *ELI BROAD Yes/No 2,217,500 1,142,917 72 BERNARD I. FORESTER Yes/Yes 504,700 391,200 73 JOHN J. BYRNE Yes/Yes 491,231 1,124,539 74 GORDON S. MARSHALL No/No 370,544 460,250 75 PAUL A. MILLER Yes/No 1,010,200 992,000 76 SHELDON N. LEWIS Yes/Yes 351,000 379,921 77 ROBERT A. BOLINGBROKE Yes/Yes 252,000 280,757 78 RAY A. BURKE Yes/No 515,717 704,879 79 JOJI HAYASHI Yes/Yes 389,292 394,711 80 JAMES A. MIDDLETON No/No 700,194 842,719 81 ROBERT E. WYCOFF No/No 1,070,321 1,055,076 82 JAMES S. MORRISON No/No 853,321 892,469 83 KENT KRESA No/No 1,002,311 379,167 84 WALTER W. MACAULEY No/Yes 517,497 498,875 85 ALAN LADD Jr. No/Yes 1,021,718 1,035,944 86 *RICHARD H. DEIHL Yes/Yes 1,632,842 1,026,250 87 *HENRY GLUCK Yes/Yes 992,331 1,017,560 88 ROBERT W. FISHER No/No 561,539 826,923 89 CHARLES R. SCHWAB No/Yes 1,373,932 1,002,833 90 *PAUL M. COOK Yes/No 645,000 1,000,000 91 BERNIE BRILLSTEIN Yes/Yes NA 1,000,000 92 *ORION L. HOCH Yes/Yes 782,621 997,227 93 *DAVID T. MITCHELL No/No 1,354,975 991,941 94 LARY R. SCOTT Yes/Yes 480,882 538,670 95 ROBERT H. SMITH Yes/No 602,900 884,800 96 *R.M. ROSENBERG Yes/Yes 694,574 975,000 97 *FRED W. O’GREEN Yes/Yes 2,782,349 973,478 98 *MICHAEL H. SPINDLER Yes/No 475,000 958,000 99 RICHARD J. PEARSON Yes/Yes 538,333 602,000 100 BARRON HILTON Yes/Yes 808,163 954,547

1988 1988 Long-term TOTAL 1 32,588,275 40,093,974 2 28,356,780 32,134,629 3 7,321,875 7,904,167 4 5,791,574 7,273,112 5 4,518,990 5,736,510 6 4,336,688 5,080,725 7 4,019,960 4,794,960 8 0 4,075,445 9 3,120,032 3,702,324 10 2,810,439 3,565,395 11 2,513,321 3,176,916 12 2,057,869 2,559,062 13 (7,012,500) 2,479,000 14 0 2,454,637 15 1,775,000 2,411,692 16 0 2,385,514 17 1,034,250 2,364,250 18 1,577,910 2,080,334 19 0 2,070,038 20 0 2,054,650 21 1,323,462 2,052,777 22 743,228 2,036,895 23 1,507,471 1,931,894 24 1,406,250 1,907,411 25 1,027,439 1,888,045 26 1,138,244 1,833,495 27 1,346,783 1,808,316 28 0 1,804,734 29 341,600 1,781,400 30 1,300,813 1,751,386 31 1,315,500 1,707,650 32 770,745 1,669,078 33 0 1,630,428 34 0 1,619,489 35 0 1,600,000 36 0 1,590,309 37 1,147,000 1,549,212 38 497,100 1,537,100 39 (1,014,730) 1,507,081 40 (0) 1,500,000 41 0 1,500,000 42 0 1,479,519 43 0 1,477,547 44 313,251 1,474,603 45 0 1,437,500 46 0 1,377,908 47 0 1,374,026 48 0 1,362,500 49 0 1,350,000 50 0 1,333,749 51 0 1,308,524 52 258,245 1,301,544 53 0 1,300,000 54 0 1,281,923 55 306,715 1,257,631 56 2,915 1,252,915 57 558,474 1,242,569 58 92,650 1,217,189 59 1,075,441 1,216,295 60 0 1,200,000 61 685,920 1,185,920 62 0 1,173,976 63 (1,095,578) 1,164,442 64 (25,800) 1,164,047 65 0 1,160,000 66 0 1,156,687 67 0 1,153,698 68 0 1,153,698 69 (0) 1,150,000 70 0 1,145,746 71 (1,915,200) 1,142,917 72 734,200 1,125,400 73 0 1,124,539 74 662,400 1,122,650 75 128,700 1,120,700 76 730,385 1,110,306 77 801,114 1,081,871 78 356,697 1,061,576 79 661,556 1,056,267 80 213,201 1,055,920 81 0 1,055,076 82 150,126 1,042,595 83 661,875 1,041,042 84 539,988 1,038,863 85 0 1,035,944 86 (1,596,205) 1,026,250 87 (4,830,375) 1,017,560 88 189,674 1,016,597 89 0 1,002,833 90 (0) 1,000,000 91 0 1,000,000 92 (3,580,549) 997,227 93 (5,800,000) 991,941 94 441,351 980,021 95 93,600 978,400 96 (0) 975,000 97 (6,719,870) 973,478 98 (3,163,500) 958,000 99 353,829 955,829 100 0 954,547

Source: William H. Mercer Meidinger Hansen

* Executive’s long-term compensation, principally stock options, is reported only over a three-year period. That amount is shown in parentheses but is not added to the 1988 total.

NA--not available either because the executive worked for a different company in 1987 or his compensation was not publicly disclosed for that year.

Cash compensation generally includes base salary and annual bonuses earned for services rendered in the latest fiscal year, regardless of whether receipt was deferred to future years. Long-term compensation includes any income from cash-or stock-based compensation plans or other sources that are paid that year but based on several prior years performance. The following items were not included in either cash or long-term compensation unless companies included them without indicating their exact amounts separately: Company contributions to 401(k) plans and cash profit-sharing plans; income from pensions; supplemental executive benefits or supplemental executive retirement plans; cash value of executive perquisites such as company cars, or retirement-oriented plans offered to all employees.

Executive are listed only if they served at their respective companies the entire year. Some executives who left during the year may have received golden parachutes or other severance pay that would have put them in the top 100 if they were listed.

GUIDE TO TITLE ABBREVIATIONS CEC Chairman of the executive committee CEO Chief executive officer CEOS Chief executive officer of a subsidiary CFO Chief financial officer CIO Chief investment officer COB Chairman of the board COBS Chairman of a subsidiary COO Chief operating officer DIR Director EVP Executive vice president FCOB Former chairman of the board GC General counsel GVP Group vice president MDIR Managing director P President PS President of a subsidiary RCOB Retired chairman of the board SECY Secretary SVP Senior vice president VCH Vice chairman VP Vice president NOT INCLUDED IN PAY SURVEY Major companies whose proxy statements were unavailable or not filed in time to be included in The Times’ California executive compensation survey:

AME Inc.

Cannon Group

Community Psychiatric Centers

Daisy Systems

Diasonics

For Better Living

Fremont General

Gen-Probe

Gradco Systems

Lincoln Bancorp

Martin Lawrence

Maxicare Health Plans