ROE v. Paid: Consumer Staples Firms Pay Well for Big Returns
The companies in the S&P 500 Consumer Staples category have posted fairly impressive return on equity figures -- and handed out fairly meaty pay packages to their chieftains, as today's ROE v. Paid: Consumer Staples chart shows.
Lots of media outlets have been measuring executive pay against the company's stock market returns over the past year. Since the
S&P 500
cratered 23.4% in 2002 and took down lots of individual companies with it, we felt a fairer measure of executive performance would be a company's average return on equity over five years. Looking at return on equity, or ROE -- derived by dividing common stock equity into net income before dividends -- is one of the easiest and best ways for investors to determine how effectively their money is being employed. (For more on our series, please read
this column.)
The consumer staples category -- which includes companies across the food chain, from
Archer Daniels Midland
(ADM) - Get Report
to
Coca-Cola
(KO) - Get Report
, as well as big consumer-goods companies such as
Procter & Gamble
(PG) - Get Report
-- performed well on the ROE side.
Stalwarts such as
Colgate-Palmolive
(CL) - Get Report
and
Kellogg
(K) - Get Report
delivered stellar ROE numbers, among the highest in the S&P 500.
The group also counted among its ranks some of the best-paid chief executives, such as Patrick Stokes of
Anheuser-Busch
(BUD) - Get Report
, whose salary, bonus and options totaled $47.1 million in 2002, and
PepsiCo's
(PEP) - Get Report
Steven Reinemund, whose compensation ran to $29 million.
Did the chiefs deserve the pay they brought home?
Click here to determine for yourself.
*Compensation figures were not available from eComp, so Yahoo! figures were used. |