BUSINESSWEEK ONLINE : APRIL 17, 2000 ISSUE
SPECIAL REPORT Who Earned Their Keep--And Who Didn't Univision Communications Inc. (UVN) has plenty of big numbers to brag about. It dominates Spanish-language television in the U.S., pulling in more of the prime-time Hispanic audience than Fox, NBC, ABC, CBS, and rival Telemundo combined. Its share price has tripled in the past three years, rising twice as fast as the Standard & Poor's 500-stock index. And its cash flow has been growing by an average of 35.5% a year. But it's a much smaller number that earns Univision and A. Jerrold Perenchio, its chairman and chief executive, one of two top honors in BUSINESS WEEK's annual pay-for-performance derby. We look at pay relative to shareholder return and return on equity--and Perenchio leads the league in the ROE category. Perenchio hasn't been given a penny by Los Angeles-based Univision since 1997, when he received just $300,000. Stack up his measly paycheck against the company's ROE, which has averaged 14% since 1996, and Perenchio, 69, easily earned the biggest return for each dollar of pay over the past three years. How does he get by? The reclusive Perenchio isn't talking. But he doesn't need the cash. A former agent and TV producer, Perenchio is a billionaire thanks in part to his 19.8% stake in Univision. In the other category--total shareholder return--the top performer also gets a relative pittance. Since 1996, David S. Wetherell, 45, chairman and CEO of Internet superstar CMGI Inc. (CMGI), has earned just a tad over $1 million in salary and bonus, plus some $2.5 million in exercised options. Not bad, but look what CMGI shareholders got: The three-year total return on CMGI stock was an astounding 13,948.4%. That won Wetherell the crown for giving shareholders the biggest bang for the CEO's buck. Wetherell's achievement isn't quite as miraculous as it seems, though. That's because his pay excludes earnings from CMGI's adjunct venture-capital partnerships. Thanks to his stakes in these affiliates, he holds stock and options worth at least $150 million today. (Wetherell also owns 15.1% of CMGI, based in Andover, Mass., and has options valued at $211.7 million, making him a billionaire, too.) Add all that in and Wetherell's score would take a tumble. Factor in CMGI's over 36% slide so far this year, and it would fall further. Wetherell couldn't be reached. Because CMGI is a typical Internet enterprise, Wetherell also lands a spot among CEOs who ranked worst on ROE. CMGI posted net income of $476.2 million in fiscal 1999, but that came only because it sold its stake in GeoCities to Yahoo! Inc. for a pretax gain of $661.2 million. On an operating basis, CMGI hasn't been profitable since 1995. Still, Wetherell didn't come close to Stephen M. Case of America Online Inc. (AOL) and Walt Disney Co.'s (DIS) Michael D. Eisner, this year's losers. Case, 41, grossed $303.2 million over the past three years as head of the Dulles (Va.) online powerhouse, while AOL's three-year return on equity was -119%. Eisner, 57, got paid even more as Disney chairman and CEO--a total of $636.9 million since 1997. Because the Burbank (Calif.) company posted an ROE of 8.4% over the period, however, Eisner did O.K. on the pay-for-profit scale. Still, his hefty package overwhelmed Disney's total return on its shares, putting Disney dead last for how well stockholders did vis-a-vis the man at the top for the second year in a row. Case and Eisner declined to comment. By Michael Arndt in Chicago _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Executive Pay TABLE: The Top-Paid Chief Executives...And 10 Who Aren't CEOs TABLE: Pay for Performance: Both Ends of the Scale TABLE: Fortunes in the Future TABLE: Pay for Market Performance: Execs Speak Out Who Earned Their Keep--And Who Didn't TABLE: Overachievers TABLE: Underperformers The Package That Launched a Dozen Lawsuits Compensation Scoreboard Glossary SCOREBOARD: 1999 Executive Compensation (.pdf) INTERACT E-Mail to Business Week Online

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