CHRYSLER CORP.'S top three bosses earned more in 1997 than all 30 members of the Daimler-Benz AG supervisory board and board of management put together.
The main difference is fat stock options.
Earnings will even out eventually. Daimler has agreed to maintain Chrysler salaries at current levels for at least two years, and Daimler Chairman Juergen Schrempp believes Germany will begin to embrace stock options.
Chrysler Chairman Robert Eaton made about $11.2 million in 1997, counting salary, bonus, the value of stock options, and other compensation. His salary alone was $1.6 million, plus a $3 million bonus.
Vice Chairman Robert Lutz had a package worth $6.3 million, according to Chrysler's proxy statement. His salary was about $1 million, plus a $1.6 million bonus.
The numbers for Daimler-Benz are not so transparent, although salaries appear to be in the same region when Chrysler options and bonuses are ignored.
In its 1997 report to the Securities and Exchange Commission, Daimler disclosed only total compensation for members of the supervisory board and its board of management. Daimler was granted a waiver on reporting requirements when it was listed on the New York Stock Exchange in 1993.
According to the SEC filing, Daimler's combined compensation for the 30 members of its two boards in 1997 totaled an estimated $19 million at current exchange rates.
The average is $633,300, but that is misleading because the 20-member supervisory board is made up of union representatives and outside directors, none of whom would be earning executive salaries.
Discounting the supervisory board suggests that the 10 managers who run the company on a day-to-day basis, including Chairman Juergen Schrempp, earn an average $1.9 million a year in salary and benefits.
That includes an option on convertible bonds that represents a profit of up to $200,000 when exercised. The total compensation also includes $4.7 million in pension benefits.