Study assails "pay for failure" at U.S. companies

By Martha Graybow

NEW YORK (Reuters) - Dell Inc., Eli Lilly and Co. and Ford Motor Co. are among the 12 worst offenders of so-called "pay for failure" for their chief executives, a study released on Monday has found.

CEOs at these companies have all received total pay of more than $15 million over the last two fiscal years, according to governance research firm The Corporate Library.

At the same time, the report said, the companies' total shareholder returns have fallen over the last five years and performance against peers slumped over the same period.

"It continues to be the case that far too much executive compensation is delivered without any link to performance at all," said the report, written by Corporate Library senior research associate Paul Hodgson.

The list includes five companies targeted by the research group in a similar study last year: Home Depot Inc., Pfizer Inc., Time Warner Inc., Verizon Communications Inc. and Wal-Mart Stores Inc.

New to this year's list were Dell, Eli Lilly, Affiliated Computer Services Inc., Ford, Abbott Laboratories Inc., Qwest Communications International Inc. and Wyeth.

At Verizon, Chairman and CEO Ivan Seidenberg was awarded $32.5 million in total compensation over the last two fiscal years, while total shareholder return declined 5 percent over the past five years, according to the Corporate Library.

A Verizon spokesman said he had not seen the report, but the company's compensation programs are benchmarked against its peers. He said Verizon's stock has risen steadily over the last 16 months, with a 34.6 percent total shareholder return in 2006, ranking eighth among 33 peer companies.