Blog Menu

CEO Salaries

April 17, 2006

Filed under: life,money — Terry Wohlers @ 08:20

According to USA Today, many of our nation’s CEOs are doing just fine, financially. The median salary for chief executives from the 100 largest companies rose 25% to $17.9 million in 2005. This compares to a gain of 3.1% for typical American workers. The CEOs of small to midsize companies received pay that was similar to or exceeded that of large companies. 

How well did some of the CEOs do last year? Oracle’s Larry Ellison was given $74.2 million. Starbucks chairman Howard Schultz, $42.5 million. Autodesk CEO Carol Bartz, $28.9 million. Domino’s Pizza CEO David Brandon, $25.2 million. Corning chairman James Houghton, $7.4 million.

And others? Sporting goods retailer Cabela’s CEO Dennis Highby, $2.3 million. American Express CEO Ken Chenault, $16.3 million plus other bonuses. Capital One Financial CEO Richard Fairbank, $249 million in exercised stock options. Cadence Design CEO Michael Fister, $3 million in compensation and options valued at up to $23 million.

What will these people do with all their money? One year of pay is more than most people could spend in a lifetime. My hope is that it is given to charities, disaster relief funds, student scholarship programs, and other places that help those in need. Perhaps if those of us that make far less could set an example for them, they will follow suit. One can only hope.

Why Lawyers Get Rich

February 6, 2006

Filed under: legal,life,money — Terry Wohlers @ 14:46

This is the title of a short article published in the December 2005 issue of Manufacturing Engineering magazine. Let me begin by saying that I have lawyer friends, including one that I count as among my best. I support our legal system in the U.S. and thank God we have it. Also, in no way do I oppose enterprising individuals and companies that create wealth in a legal and ethical fashion. Now, for the facts, according to the article.

Eight-seven percent of U.S. corporations are engaged in some type of litigation. An average company is juggling 37 lawsuits, while corporations with revenues of $1 billion or more are dealing with 147 at any given time. The article goes on to say that these organizations are spending staggering amounts of money and other company resources on business disputes. Many of them are unable to predict the cost of managing them, so spending soars.

I’m not a legal expert, but I do know that litigation is necessary in some cases. One needs to protect investments in intellectual property, the rights written into agreements, and so on. However, people in business are often quick—too quick, in my opinion—to file lawsuits when alternative methods may be effective and far less expensive. For example, I know of an instance where a simple phone call from one CEO to another solved a problem—one that would have otherwise turned into expensive litigation. Lawsuits often result in years of pouring money down a legal drain and the lawyers are grinning from ear to ear all the way to the bank.

Design and manufacturing organizations in the U.S. need good lawyers, but they also need good engineering and manufacturing professionals. A lot has been published recently on the impressive number of engineers that are graduating in China and India, compared to U.S. schools. Many of the best students in these countries are concentrating on engineering, while ours are pursuing careers in law and other areas. Law, medicine, banking, and advertising, as well as many other professions, are all incredibly important to a community, but they do not contribute to the wealth of a nation. Manufacturing creates wealth. Litigation does not, and it can drain the resources of an otherwise prosperous company.

Become an Engineer

August 12, 2005

Filed under: education,life,money — Terry Wohlers @ 07:56

This commentary is written for young people that are considering career options. Let’s assume for a moment that you have an interest in new product design and manufacturing. Opportunities abound for bright and creative individuals in this field. It is true that many manufacturing-related jobs have been lost to offshore outsourcing, but a large number remains, particularly in niche areas where sophisticated or high-priced products are developed. One example is aircraft. Another is medical devices and instrumentation.

More than 900 people responded to a survey conducted by Machine Design magazine earlier this year. Sixty-eight percent said that they would recommend engineering to friends and children. They went on to say that they enjoyed seeing their ideas lead to new products that improved the lives of others. One respondent said that after years as an engineer, doors open to many careers because engineering offers a breadth of experience that you cannot get from other professions.

Engineers are exposed to some of the most exciting technologies available. Consider the newest generation 3D printers that are used for product design review and validation. Consider also additive processes, such as laser sintering, that are being used to manufacturing highly complex products for the aerospace, motor sports, medical, dental, and consumer products industries.

How much money can one expect to earn? The average salary for engineers, according to the survey, rose to $70,600, up from $68,000 last year. Computer and electronic product manufacturing is the highest paying industry, with an average salary of $81,000. Electrical equipment, appliance, and component manufacturing followed at $75,000. Medical equipment and supplies manufacturing was next at $72,000.

So if you’re unsure what to do in the future, give product design and manufacturing serious consideration. A high percentage of engineers are challenged and like what they do, and are making a comfortable living doing it.

High Gasoline Prices

June 11, 2005

Filed under: life,money,travel — Terry Wohlers @ 09:22

I continue to hear people in the U.S. complain about the high cost of gasoline. The average price for a gallon of regular unleaded is about $2.10 in the U.S. (That’s about €.55 per liter.) Compared to the past, that’s high. In recent years (prior to mid-2004), gasoline ranged from about $1.40 to $1.75 per gallon (€.30 to €.38 per liter).

I don’t like paying a lot for gasoline anymore than the next guy, but is it really that high? I was in Europe earlier this week. The price for regular unleaded gasoline in Belgium was €1.20 per liter, which is $5.54 per gallon. And in England, it was £.85 per liter. That’s $5.82 per gallon. Do we really have it so bad in the U.S.? So the next time you fill up, consider what people are paying in other parts of the world.

Super Sunday

February 6, 2005

Filed under: entertainment,life,money — Terry Wohlers @ 12:58

Super Bowl Sunday is a day in which consumers across the U.S. will burn through $5.6 billion. For those of you who do not follow some of the peculiar American traditions, the Super Bowl is arguably the single biggest sport event of the year. I love college football and I’ve been a season ticket holder for the Colorado State University Rams for years, but this is no college game. The top two teams in the National Football League meet at 16:25 today to determine who is the best. My family and I are looking forward to joining some friends for the big event. However, I’m more interested in the wild commercials seen for the first time and Paul McCartney’s halftime show than I am in seeing the New England Patriots take on the Philadelphia Eagles. One exception is watching former Colorado State standout Dexter Winn return punts for the Eagles.

I like the game of football and it will be fun to see some good hits. Sadly, some of the players have tarnished the image of the pro version of the sport. (The same could be said about professional basketball, baseball, and hockey.) On and off the field, these in-the-spotlight athletes could and should serve as role models for our youth. Many do, but others do not. After big plays and touchdowns, some of them dance around like they’ve never been there before and it can be a real turnoff. Off the field, some of the same players are caught doing all types of shameful and unlawful acts. The obscenely large contracts that they negotiate leave you wondering how professional sports have gotten to this point. 

Later today, I will be at the television for the big game like 140 million others. But it won’t be for the purpose of intently watching each play or caring about who comes out on top. Instead, it will be to spend time with family and friends, enjoy some good food and drink, and have a laugh or two from some of the hilarious commercials that debut each year on this day.

Company Execs that Share the Pain

July 19, 2003

Filed under: money — Terry Wohlers @ 13:49

When times are tough, I’ve always found it disheartening to watch companies lay off employees or reduce pay and other benefits, while top executives receive embarrassingly large sums in salaries and bonuses. “How can they do it in good conscience?” I ask myself. It happens time and again, even among executives who do a seemingly poor job at managing their company.

The July 7, 2003 issue of Design News published an interesting story that counters some of my pessimism on this subject. Willem Roelandts, president and CEO of Xilinx, a company in the semiconductor business, authored the article. His company, along with many others, have been impacted by what many describe as one of the worst recessions ever to hit this industry.

Through a variety of efforts, Roelandts explained, the company instituted a variety of cost-cutting measures. The most significant was savings from a company-wide strategy to reduce payroll expenses. The CEO and executive staff received the largest reduction (20%), following by directors (10%), mid-level management (6%), non-management and salaried employees (3%), and hourly employees (0%). That’s right: No pay cut for the hourly employees.

The strategy paid off. The company delivered new products in 18 months, while gaining market share. Meanwhile, employee morale remained high. In fact, the company earned a Number Four ranking in Fortune magazine’s 100 Best Companies to Work For. Roelandts said that they were totally upfront with employees and explained to them the dilemma and financial bind that the company faced, while asking for their feedback, advice, and support. It’s my hope that the top management at other companies can learn from Xilinx and others like it.

« Previous Page